When buying a house in Athens, it’s a good idea to get pre-approved for a loan before starting the search. However, that’s not usually how it works. It’s so easy to search for homes, way easier than making an appointment with a lender to discuss the financial part of buying a home. It’s certainly more fun to pick a house than to pick a mortgage, but having a mortgage will make it easier to actually buy the house!
What’s the ratio of income/debt?
The common ratio used by lenders for debt to income is 28 percent for the mortgage payment and 36 percent or less for all expenses. All expenses includes car payment, credit card payments, child support, student loans and any other long term debts. These ratios may be different depending on the type of loan, credit score, savings, and down payment.
How much can I afford to pay for a home?
The 36% rule is a good way to start. This calculator will use your income and expenses to give a good idea of the payment you can qualify for. You will need to decide if this is in your comfort zone.
With this calculator you can enter the desired monthly payment along with your financial information, to get to the purchase price you’re able to afford. No matter what the calculator shows, it’s important to think about your spending habits and make sure it’s not more than you’re comfortable with spending.
This check-list of Tips for Buying a Home is helpful to be prepared when you start your home search.
See all blog posts about Buying a Home HERE.