It’s a matter of fact that your lender decides how much you can borrow, but you yourself decide how much you can afford.
Lenders decide how much of a mortgage loan you can have based on the financial information you provide them. They are careful and thorough, but they won’t know your lifestyle, financial needs and spending patterns as well as you do. So before you even go to a lender to get prequalified for a mortgage loan, first sit down and take an honest look at your finances.
List down all your regular expenses and incidental purchases and compare your monthly expenditure to your income. Is there enough room for you to comfortably afford a monthly mortgage payment? How much of a monthly mortgage payment can you afford without struggling or stretching your budget too tight? Remember that you don’t want to maximize your budget so much every month that you no longer have extra money for emergencies or unexpected expenses. Consider also any changes that will occur in the next year that may significantly impact your finances, such as a change in your number of work hours, or a new baby in the family, or one or several of your children going off to college or just starting school.
Once you’ve thought all these things through and looked at the numbers you bring in and spend, you’ll have a better idea of how much home you can really afford. Being realistic and setting a budget for yourself will ensure that your new home will be something you can enjoy with peace of mind and security instead of an added stress factor in your life. You want to be able to enjoy all the opportunities your new home will give you to spend money, such as furnishings and landscaping, so be sure to leave a little room in your budget for those.
If you are planning to buy a home, let The Incorvaia Team make the process as easy as possible for you. Call us at 440-879-7130 today!
