Home buying is an exciting time, but it’s important to not let your eyes get ahead of your wallet. One of the first things you should do when preparing to search for your next home is to figure out exactly how much you can afford on a home. A general guideline to go by is the 28/36 rule. It states that a household should not exceed 28% of its gross income on housing expenses and 36% of total debt. On top of a mortgage payment, it’s important to consider how much money you can use as a down payment. Ideally, you should aim to put at least 20% of a property’s value as a down payment, as this allows you to avoid having to pay private mortgage insurance.
There are a variety of home affordability calculators online available to give a basic idea of the price range you should look at, but these are generic and shouldn’t be relied on. Instead, it’s important to get a preapproval for a mortgage. This involves speaking with a lender, which can be done over the phone, and verifying your financial information. It may take more time than filling out basic information on a website, but gives you an accurate idea of what your budget should be and holds much more weight with sellers as proof that you can obtain financing. For homes in Western New York, 1st Priority Mortgage Inc. is a great source to use. They specialize in the local area with over 30 years of business experience and offer free preapprovals. To schedule, a consultation feels free to contact one of their Mortgage consultants, whose information can be found below.
Phone: (716) 553-6171
Phone: (716) 989-7794