Buying a property is a very exciting and important life milestone, however, it is one that comes with a substantial cost. One of the first steps you will want to take when buying a home is determining the amount of mortgage that you will be able to afford, which will depend on many factors. If you are interested in purchasing a home in Mount Pleasant, South Carolina, and want to gain a better understanding of how much mortgage you will be able to afford, Lucey Mortgage Corporation can help. Our loan specialists can work closely with you to help determine the best financing options for your situation.
Things To Consider When Applying For a Mortgage
When you are trying to figure out how the amount of mortgage you can afford to help you finance a home, there are several things to consider. First of all, you will need to evaluate your monthly income and calculate any investments you have outside of that total, including any earnings from stocks, property rentals, etc. You will also need to review the overall amount of debt you owe and what you are required to pay back each month, including costs for student loans, credit cards, car payments, etc. You will then want to estimate the amount you can afford to pay for the down payment and factor in the costs of taxes, homeowners insurance, and interest rates. It is recommended to save up for the cost of at least three monthly payments in the event that any unexpected costs arise.
Determining the Right Amount For a Mortgage
When you are attempting to determine the amount of mortgage you can afford, a general guideline to follow is to spend no more than 28 percent of your monthly income on housing costs, and to not spend more than 36 percent on monthly debt. Debt-to-income ratio, (DTI), compares a borrower’s monthly income to their monthly debt, and the higher a borrower’s DTI is, the more challenging it will be to obtain a mortgage. On the other hand, if your DTI is lower, you will be more likely to be eligible for a mortgage with better rates and terms. With this in mind, you will want to pay off as much of your current debt as possible so you can qualify for the best mortgage terms when buying a home.
Get Assistance Applying For a Mortgage
There are numerous factors to consider when you begin taking the steps to buy a home and when you are attempting to determine the amount of mortgage that you will be able to afford when financing your purchase. If you are interested in buying a home in Mount Pleasant, South Carolina and are looking for help applying for a mortgage, Lucey Mortgage Corporation can help. Contact us today for a consultation.