Comments Off | Thursday, May 13, 2010
Whether you’re a first-time buyer looking for the perfect starter house, or a seasoned pro trading up to your waterfront dream home, you are probably asking the same questions: Can I afford this? And is this the right move at the right time?
Of course, you can use a mortgage calculator and ask the experts — lenders, agents, and mom — but the reality is that you are the only one who truly knows whether you can afford to buy right now.
Simple Budgeting: Start with is a detailed expense breakdown. Analyze what you spend — at least get a full month’s snapshot. You’ll see where you may have wiggle room in your budget and what you can afford for housing. (Be sure to count all those little incidental expenses like dry cleaning and yes, those mid-afternoon Starbucks lattes count in the budget, too!)
Debt-to-Income Ratios
If you figure out that you can afford your projected budget, chances are you’ll qualify for a mortgage in your range. Lenders will determine how much loan you can afford by using something called your debt-to-income ratio.
If your credit is stellar, you will be rewarded. Lenders may stretch these ratios allowing you to purchase more home and take advantage of more lending programs.
So go ahead and get qualified today. It is simpler than you think.