Before you start your search you need a realistic expectation of how much home you can afford. The best way to do this is to set up an appointment with your preferred lender and get thru the pre-qualification process and finally obtain a pre-approval.
To qualify, you need a good credit, a history of savings and a ratio of recurring debt to gross monthly income of around 45 percent or less. You can get a free annual credit report each year at www.annualcreditreport.com. It’s best to have a credit score of at least 620 but the best rates goes to borrowers with much higher scores.
Whatever mortgage amount your lender approves, only you can decide what monthly payment you are comfortable with. In addition to your mortgage payment (Interest, Principal, Taxes and sometimes Homeowner’s Association Fees), it is also a good idea to budget for repairs and maintenance and enough to maintain your lifestyle and hobbies.
Posted in: FAQ for Buyers