As you set out to find the perfect home, the first step is determining how much you’re able to spend on it. The budget for your new home will determine everything from how big your new space will be, to the type of neighborhood you’ll live in. Make sure your new house isn’t more than you can afford by following these steps to calculate your home-buying budget:
Determine Your Monthly Income
Start the hunt for your future home by determining your monthly income. This will allow you to see much you can spend on your mortgage each month. To do this, list out your various sources of income. This list will include your salary and any freelance work, gigs, investment earnings, child support, and more. With a clear idea of what you make each month, you’ll be better prepared to start looking for homes in your price range.
Calculate Your Debt
Another step in creating your home-buying budget is to determine your debt-to-income ratio (DTI). Calculate your DTI by adding up your monthly debts. This list should include car payments, mortgages, credit card bills, student loans, and more.
Next, be sure to divide this amount by your monthly income. With this information in mind, you’ll be better equipped to determine how much you can afford to pay for your mortgage.
Contact a Loan Officer
Getting pre-qualified for a mortgage is a major part of building your budget. This process involves finding a loan officer that will help you navigate finances. The right person will provide you with a pre-qualification letter that details the amount you can borrow.
The experts at Fairway PNW can help you begin your home-buying journey. Whether you need a mortgage as soon as possible or you simply need advice, reaching out to a loan officer will help accelerate the process.
Work With a Real Estate Agent
Working with a real estate agent is another step in calculating your home-buying budget. The right agent can help you choose the best number by taking your financial obligations into account. An agent can also help you choose homes in the right price range as well as negotiate with sellers on your behalf.
As you search for a home, it’s essential to stick to your budget. This will make it easier to narrow down your options and guarantees that you don’t waste time looking at spaces that are out of your price range. Keep these tips in mind as you search for your dream home.