If you’re a current home buyer in the Florida or Alabama real estate market, you probably already know how much mortgage you can afford, but have you thought about how much home you can afford? Today, United Mortgage Group is sharing how you can determine how much home you can truly buy!
Get Your Credit Score Stat!
If you’ve followed along with our blog for some time, you know how important it is to know your credit score and how you can affect it. Having a positive credit score plays a big part in determining mortgage loan pre-approval and correctly calculating a better term on your investment. Check your current report with one of the many FICO reporting sites of your choice well before you start the hunt for a new home. If you see any mistakes in your report, be sure to alert your credit reporting agency as soon as possible.
When you hear the term Debt-to-Income Ratio, lenders are referring to the comparison of your monthly debt and your monthly income. Buyers with a higher level of debt will have a more challenging time finding mortgage loans with lower interest rates, while buyers with a lower level of debt will have a higher ability to take on a mortgage payment. If you are looking to make a splash in the real estate market while mortgage rates are low, start paying off any outstanding debt now!
You know what they say — the bigger the down payment, the better the mortgage rate! Well, maybe not many people are saying it, but they should! If possible, always plan to put down at least 20% of your purchasing price. The more you put down, the smaller your monthly mortgage payment will be, and you’ll have a better loan-to-value ratio, which lenders love! The reason why? Because they have to lend you less money over the term!
When calculating how much home you can afford, don’t forget to consider these final factors. Closing costs are often the most overlooked piece of budgeting for a total home payment, and they can include lawyer fees and transfer costs. Don’t forget to account for them! Plan to set aside your property taxes so your lawyer can put them in escrow; that way, they can be added to your monthly mortgage payments.
If you’re still looking for help determining how much Florida or Alabama property you can truly afford, contact United Mortgage Group today! Not only can we help you determine which home is right for you, but we can also help you secure the funding needed to make it all yours!