How much house can I afford? That is a question many home-buyers ask themselves when they are in the process of buying a new home. Purchasing a home is one of the most significant investments you will make in your lifetime.
1. How Much Down Payment Do I Need To Buy A House?
The required down payment amount will depend on various factors, including the terms your mortgage lender mandates, the type of mortgage loan you get, and how much money you have saved up.
2. What Are The Various Types Of Mortgage Options?
There are several types of mortgages, including 30-year fixed-rate loans, 15-year fixed-rate loans, and adjustable-rate mortgages, where the interest rate changes after every 3 to 5 years. Talk to your lender about all your options.
3. What Numbers And Ratios Are Important To Mortgage Lenders?
Now that you have decided on your down payment and mortgage, the next step in calculating how much house you can afford is to figure out your debt-to-income ratio (DTI). This number is significant because it shows lenders the percentage of your income allocated to debt repayment every month, including your mortgage payment.