If you’re looking to purchase a new home, you may likely be wondering about exactly what you can stand to pay for. Whether you’re a first time buyer investing in a new home, or purchasing a second home or property to invest in, this is a question you definitely have to take into consideration. We can help you figure out how much house you can afford by calculating your home affordability!
So what does your home affordability status rely on? In order to determine how much you can afford, a number of factors need to be taken into account. For the purposes of estimating home affordability, we consider you annual household income, the monthly spending, your credit score, down payment, monthly mortgage payment, and a number of other factors.
The annual income of the household is considered, taking into account salary, commissions, and tips as well. This contributes to towards determining how much you are able to pay on a monthly basis.
By determining your monthly spending, it gives a clearer idea on how much you are able to put towards mortgage payments. This is done by considering your monthly bills, money spent on utilities and necessities, as well as any debts.
Your credit score can help determine whether your interest rate will be low or high. The higher the credit score, the lower the interest rate, which means lower payments.
This is the initial payment made for the new property, and is usually up to 20% of the total price. The more money you put down for the down payment, the lower your monthly mortgage payments will be. Knowing how much you can afford to contribute towards the down payment is a significant part of calculating home affordability.
To get a proper estimate of home affordability, we also take into consideration the monthly mortgage payment you would be making. This will include a principal amount with interest, as well as other associated fees and taxes.
Book a consultation with one of our experts or use our home affordability calculator to determine how much house you’re capable of affording!