Tyler Minges Home Buyers Guide 2017 Home Buyers Guide | Page 13

HOW MUCH CAN I AFFORD? | 10
HOW MUCH CAN I AFFORD?
When buying a home, your lender will look at your
income, assets, and down payment. They’ll also want to
know about your liabilities and other financial obligations.
This includes things like credit card debt, auto loans,
student loans, child support, taxes and insurance—all
which impact the size of the loan you can afford. This is
called your “debt-to-income ratio”.
Once you know the ratio, you’ll be able to calculate your
maximum monthly payment you can afford for your home’s
mortgage, insurance, and property taxes.
Online mortgage calculators can help you
determine what priced home you can af-
ford based on that information and current
interest rates. If rates go down your buying
power increases, but if rates go up your
buying power will go down.
TOTAL DEBT
÷
TOTAL INCOME
=
DEBT-TO-INCOME
RATIO
RENT VS. BUY
If you are renting and think you can’t afford a home...
THINK AGAIN! Buying costs significantly less than
renting! The percentage of income needed to rent
is nearly double than the percentage needed to buy!
And rents are, in fact, rising while buying a home is
becoming more affordable.
Tyler Minges, HUFF Realty | BUYER’S GUIDE TO REAL ESTATE