As you enter the world of real estate, funding for your next home purchase stands on the forefront of the homebuying process. Understanding what you can afford may help you in starting your journey to find your next abode.
To figure out your finances to determine how much home you can afford, consider these factors:
If you’d like to use a system to manage your finances, consider utilizing the 28/36 rule. With this method, you dedicate no more than 28 percent of your gross monthly income to household expenses such as utilities and mortgage payments. Your debt shouldn’t take over 36 percent of your gross income.
Using this system helps you manage debts and financial duties, and demonstrates to mortgage lenders you can afford a monthly mortgage payment.
Before starting the home buying journey, it’s ideal to consider your overall standing to make sure you’re ready to purchase a home.
Consider your credit score - a higher credit score may spell approval from more lenders and lower interest rates. Do you have adequate cash reserved to afford a down payment, closing costs and other fees associated with buying a home? By answering these questions you’ll get a better idea if homeownership is feasible in the near future.
Purchasing a home takes effort and much consideration, so take your time during the process and figure out your finances to jumpstart your journey.
Matthew has been licensed since 2011 and has dealt with all aspects of real estate. He currently holds the position of asset manager and agent to over 200 Investment rental portfolio properties from multifamily units as well as single family homes and condominiums. Matthew also carries designations to his real estate license including (ABR) Approved Buyers Rep, (SFR ) Short Sales and Foreclosure Rep. Over $7 million in assets purchased and 130 Investment properties bought to date. Clients contact Matthew to purchase, manage and sell Investment properties for profit.
