How Much Home Can I Afford?
With more and more people losing their homes to the foreclosure process, it's important to make sure you don't buy more home than you can afford. Buying a home is one of the biggest financial decisions you'll make in your life. You need to take the time to understand the financing process and accurately evaluate your budget and expenditures to arrive at a mortgage you can afford.
You have many resources for calculating how much home you can afford. The website for the Ginnie Mae federal loan program provides you with a reliable loan calculator. This calculator requires you to enter your gross annual income, monthly debt, and other information to get an initial estimate.
If you're looking for a loan calculator with more attention to detail, you can find several online. It's a good idea to use a calculator that takes into account the down payment you can make at this time, as this will greatly affect the terms of your loan. You can also find calculators that create estimates for your desired interest rates and loan terms. A thorough mortgage calculator should also include estimates for taxes and homeowner's insurance.
Before you buy a home, you need to consider what type of loan works best for you. It is important to note that your credit rating plays a major role in the type of loan you qualify for; so the loan terms that may be best for you, unfortunately, may not be available to you if you have a less-than-stellar credit history. It's a good idea to explore your options with a few different lenders before you settle on the one that's right for you.
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