When it comes to buying a home, do you know how much loan you can handle? For most people who are looking to buy a home, applying for a loan is not new, but navigating the financial world can be kind of tricky.
Before you apply for a home loan, taking time to check your FICO score is important. Depending where your credit score is can have a huge impact on the kind of loan you get and if you
even qualify for one. Any credit score above 720 usually qualifies for good rates. Talk to your loan officer about what your credit score qualifies for you.
Another important term to understand is debt-to-income ratios.When it comes to mortgage loans, the general rule of thumb is avoid dedicating more than 28% of your monthly take-home income. In mathematical terms, if you are taking home $50,000, you should avoid paying more than $1,166 per month toward your home (i.e. $50,000 x 0.28 = around $1,166). Again, if you have any questions or concerns, talk to your mortgage lender who will be able to answer all your questions.
As you move forward with buying a home, remember to consider future expenses. Don’t spread yourself too thin where you can’t pay your bills or save for your retirement. Talking with your loan officer and real estate agent to help you find the right home for you at the right price.
Give me a call today and let me help you find your dream home today.