Determining How Much Home You Can Afford

#

Find out how much home you can afford.

Thinking about buying a new home?  Before you start hitting open houses, it’s important to understand your home buying budget.  Even if you’ve been saving for years, there are other factors that will affect how much home you can afford.  Here are some of the things that will dictate your ability to buy a home.

Savings

As previously mentioned, how much money you have saved up will affect your ability to purchase a home in your area.  As a general rule, you should have enough money saved to be able to afford a down payment on the house you want.

Annual Income

This is the combined annual income for you and your co-borrower.  This number should include your income before taxes, including extras like commissions, bonuses, overtime pay, investment income, and so on.

Debt

The amount of personal debt you have will also affect your budget.  This number should include all of your and your co-borrower’s monthly debts such as student loans, credit card payments, car payments, child support, and so on.

Homes in Your Area

Your ability to afford a home is also dictated by the general cost of homes in your area.  While your budget might get you a sprawling ranch in Iowa, the same amount of money might get you a shack in the heart of Southern California.  It’s important that you factor in the list prices of homes in your area.  Finding a local real estate agent will help you better understand the type, size, and location of the home you can realistically afford.

These are some of the main factors that affect your ability to afford a home.  If you are ready to take the plunge on your dream home, then make sure you have trusted real-estate financing professionals by your side.  To find the best escrow services in Hermosa Beach, California, contact the experts at Brighton Escrow.  Our dedicated team is ready to assist you with all your real estate financing needs.