One of the critical first steps to buying a home is to find out how much you can afford. Getting real about your finances may seem like an extra headache, but to get on the path to your dream home, it is an absolute necessity. Below are a few different ways to help you determine your buying power in today’s market.
Analyze your financial situation
Before you make any moves towards homebuying, it’s important to know where you stand financially. Take a look at your current savings account and how much debt you owe, figuring out your debt-to-income ratio is vital to the home loan process. Track how much money you earn each month, and roughly how much you spend each month. If you want to start boosting your savings account to increase the amount for your down payment, formulate a savings plan you can commit to each month or each paycheck. If you’re unsure about your credit, you can review it with a loan officer.
Check out our mortgage calculators
Summit Funding has a number of online calculators that can serve as helpful tools. You can find these calculators here. These calculators will take care of the math for general monthly payments, rent vs. own calculations and more. These calculators are great for getting estimated figures, for exact numbers, please talk to a loan officer!
Talk to a loan officer
The easiest and most accurate way to find out how much home you can afford is to talk to a Summit Funding loan officer. They will take you through the process of getting prequalified for a home loan. By getting prequalified, you will be able to find out a how large of a loan you may qualify for and discover a comfortable monthly payment.
Once you’re prequalified, you will be able to narrow your home search to find the perfect one within your price range. Getting prequalified will also put you at an advantage when you’re ready to place an offer on a home and give you negotiating power over other buyers who are not prequalified.