As you enter the world of real estate, funding for your next home purchase stands on the forefront of the homebuying process. Understanding what you can afford may help you in starting your journey to find your next abode.
To figure out your finances to determine how much home you can afford, consider these factors:
If you’d like to use a system to manage your finances, consider utilizing the 28/36 rule. With this method, you dedicate no more than 28 percent of your gross monthly income to household expenses such as utilities and mortgage payments. Your debt shouldn’t take over 36 percent of your gross income.
Using this system helps you manage debts and financial duties, and demonstrates to mortgage lenders you can afford a monthly mortgage payment.
Before starting the home buying journey, it’s ideal to consider your overall standing to make sure you’re ready to purchase a home.
Consider your credit score - a higher credit score may spell approval from more lenders and lower interest rates. Do you have adequate cash reserved to afford a down payment, closing costs and other fees associated with buying a home? By answering these questions you’ll get a better idea if homeownership is feasible in the near future.
Purchasing a home takes effort and much consideration, so take your time during the process and figure out your finances to jumpstart your journey.
As a forty three-year resident of Swampscott and having been in Real Estate for 21+ years on the North Shore of Boston, I have had top award-winning sales performances year after year in our local community. Achieving top sales results with extensive knowledge of Swampscott, Marblehead and the surrounding north shore towns have made me an expert in my field and demographic area. I am considered one of the best negotiators around, have tremendous relationships with inspectors, lawyers, appraisers, contractors, and even my fellow colleagues in this business. I pride myself on my attention to detail, expert transaction coordination, fiduciary obligations, knowledge of the real estate legalities, and ability to handle the most important purchase or sale of your financial portfolio…YOUR home!