Understanding Home Affordability

How Much Can I Afford?

A Simple Guide to Your Dream Home

Making Your Homeownership Dreams a Reality

At HomesNash, we believe in making the journey to homeownership as clear and straightforward as possible. One of the first steps is understanding how much you can afford to spend on a home. Here's a simple guide to help you calculate your home-buying budget:

Step 1 - Assess Your Monthly Income:

Begin by calculating your monthly income. This includes your salary, any regular bonuses, and additional income sources like rental income or freelance work.

Step 2 - Determine Your Debt-to-Income Ratio (DTI):

Lenders use this ratio to assess your ability to manage monthly payments and repay debts. Calculate your DTI by adding up your monthly debt payments and dividing them by your gross monthly income. A DTI of 36% or lower is preferred by most lenders.

Step 3 - Consider Your Down Payment:

The size of your down payment affects your mortgage amount. A larger down payment can reduce your loan amount and potentially your monthly mortgage payments.

Step 4 - Estimate Your Monthly Expenses:

Don't forget to include other monthly expenses such as utilities, groceries, insurance, taxes, and any other regular payments.

Step 5 - Use the 28/36 Rule:

A common guideline is that your mortgage payment (including taxes and insurance) should not exceed 28% of your gross monthly income, and your total debt payments should not exceed 36% of your gross income.

Step 6 - Factor in Additional Costs:

Remember to include costs such as property taxes, homeowner’s insurance, potential homeowners association (HOA) fees, and maintenance costs in your budget.

Step 7 - Plan for Future Changes:

Consider potential changes in your income or expenses in the future, such as a growing family, education expenses, or career changes.

UNDERSTAND YOUR BUYING POWER

A Tool for Better Planning

To simplify this process, consider using our online mortgage calculator below. This tool can help you estimate your monthly mortgage payments based on the home price, down payment, loan term, and interest rate.

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Your total monthly payment

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Let HomesNash Guide You

Navigating through the financial aspects of buying a home can be complex, but you're not alone. At HomesNash, we’re here to guide you through every step, ensuring you make informed decisions about your future home.

Ready to find out how much home you can afford? Contact HomesNash today, or use our mortgage calculator below, and let’s take the first step towards your dream home!

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