How Much Mortgage Can I Afford?
What's The Best Price Range For You?
For a first-time homebuyer, determining your price range is a smart way to begin the process. Your mortgage payment will generally include the principal and interest on your loan, as well as property taxes and insurance. The term of the loan and interest rate also determine your monthly mortgage amount.
3x Your Income
One guideline is to look at homes that cost about three times your annual gross income. Each situation is unique, and some homebuyers have levels of savings, debt or other factors that may impact their target range.
Can You Handle a Higher Monthly Payment?
If you’re currently renting, you may already have a sense of the monthly housing payment you can afford. As you make the transition to homeowner, you should weigh whether you can handle a higher monthly payment or if your income and budget point you toward a mortgage payment equal or lower than your current rent. Keep in mind that in addition to mortgage costs, as a homeowner you’re also responsible for maintenance, utility, and repair costs.
Getting pre-approved for a mortgage is a great way to know exactly how much you can afford.
Buying your first home is an exciting time, filled with dreams, possibilities, and questions. Take advantage of programs and information designed for first-time homebuyers like you.Learn More