What kind of home can you afford?
Some girls dream about the perfect wedding. Others a great career. Ashley, on the other hand, has always dreamt about owning her own home and how to decorate it.
So Ashley asked her mortgage broker, “How much house can I actually afford?” You may not have your broker on speed dial yet, but they can give you beneficial advice and guidance before you even qualify for a mortgage.
Your mortgage broker can help you review your budget. If you are like Ashley and don’t have a budget yet, simply write down all of your monthly expenses (including your current rent or mortgage payments) and determine what kind of monthly payment is possible for you. A good rule of thumb is to spend no more than 30% of your gross income on housing costs.
Once you have your budget, take a look at your savings. Ashley has already learned about all of the great ways to start saving – but if you can manage a larger down payment there are many benefits:
- More financing options
- Better rates
- Avoid private mortgage insurance
- Less interest
Now, before you contact your lender, check your credit report. This prevents any surprises that may arise before you pre-quality. Many brokers also offer credit repair.
Once you are ready to pre-qualify, your mortgage broker can tell you what you need to have handy (think paystubs), help you make sense of the mortgage process and find you the best fitting mortgage product.
With the assistance of a mortgage broker, it is easy to find out what exactly you can afford, for every stage of your life. Keep following Ashley’s journey as she learns more about what it takes to buy her first home.