How Much Can You Afford?

 

So, you’ve finally decided to buy a new house, right?

Well, that’s the reason, you’re probably here to find out how much you can actually afford!

And it couldn’t be wrong to say that when you come up with a mortgage calculator. Doing so may ultimately end you up in any possible pitfalls.

And if you think making a budget could be potentially daunting, then you’re probably mistaken! Instead, coming up with a budget is pretty simple and straightforward.

How to determine the amount I can afford?

The following are the important factors involved when it comes down to calculating how much you can really afford. Let’s discuss them in detail!! 

Ø Income: This generally comprises the money that you receive in the form of salary or income from your company where you are working in. This helps you give a clear idea of what you can really afford to pay every month.

 

Ø Cash Reserves: This is nothing but the money available to make a down payment and cover closing costs. Also, you can even use your investments, long-term savings, and other forms of cash reserves that you have saved since you are earning.

Ø Debt and Expenses: This includes the expenses related to student loans, credit cards, car payments, insurance, groceries, utilities, to name a few.

 

Ø Credit Profile: Your credit score and the amount of debt.

 

The 28%/36% rule - what it is and why it matters

Well, you must use a mortgage payment calculator to know how much you can really afford to buy a house!

Make sure that you use 28%/36% rule which simply means that you must not spend more than 28% of your income and not more than 36% on debts (including loans related to a vehicle, insurance, student loans, etc)

Example: Let’s say you are earning $5,500 a month and have $500 in existing debt payments!

It’s incredibly important for you to ensure that your monthly mortgage payment for your house must not exceed more than $1,480.

When it comes down to evaluating the home affordability, the 28%/36% rule is the best home loan calculator accepted while adhering to your entire financial situation into consideration to determine how much house you can really afford.

How much amount of property can I afford with an FHA loan?

Homebuyers can easily avail Federal Housing Agency mortgages with credit scores of 500 or more. This would certainly help you get into a home with less money down.

If your credit score is more than 580, you can put down as little as 3.5 percent while you’ll need to put down 10 percent of the purchase price if your score is 580 or below.  

How much amount of property can I afford with a VA loan?

Only retired service members or their spouses are eligible for down payment-free mortgages from the VA. If you want to get into a new home without breaking your bank, this could be an incredibly beneficial option.

Final Thoughts

So, that’s a wrap to the tips that may help you know how much you can afford!

When you effectively use the best mortgage calculator, you’ll have an exact idea of how much amount of property you can actually afford to buy.

If you don’t have time to do so or already busy somewhere else, choose PureLoan!

PureLoan is a credible online destination that let you leverage the calculator to know how much your property will cost per month.

To know more about services, visit https://www.pureloan.com/ today!!