How Much House Can I Afford?
Buying a home is usually the most expensive purchase people make in their lives. It is considered to be a symbol of success which signals to others that you are getting closer to fulfilling the American dream. Knowing that buying a home is a big financial and psychological commitment, finding out how much you can afford should be your #1 priority.
To start your home buying journey, you need to be mindful of the following four things:
- Establish your priorities
o Make a list of your ideal home (features, location, type of property, age, square footage)
- Calculate how much you can afford
o Use the 28%/36% rule
o Know your debt-to-income ratio (most lenders prefer a DTI under 36%)