How Much Home Can I Afford?

Categories: ReDesign, Uncategorized | Posted: May 16, 2017

One of the most asked questions associated with house hunting is this one: “How much house can I afford?”  It is important to sit down and figure out exactly how much house you can afford.  At Regency Homebuilders, we have a wide price range that can fit any families budget.  Here is some advice on how you can figure out how much home you can afford!

{Rule of Thumb}

A good benchmark is to spend no more than 36% of your gross monthly income on your total debt, including your mortgage payment and other debt like car payments and credit card payments.  You will need to lower your mortgage payment if you have more debt.

{More than a Mortgage}

Home ownership comes with more than just a mortgage and interest.  Remember that there are other costs that you need to remember:

Property taxes: You will need to make property tax payments. Whether a yearly lump sum is due, or whether you pay monthly with your mortgage payment, this is something to prepare for.

Maintenance and repairs: Without a landlord to bear the cost of maintenance and repairs, you must factor into your budget how much this will cost for you.

Utilities: In many cases, your home is larger than your rental, which means it will cost more to heat it.  Electricity and water costs will also most likely increase, along with sewer and garbage collection.

Insurance: Home insurance is usually more than your rental insurance, so do your research on how much more you will be paying for this expense.

{Test Drive Your Mortgage Payment}

Take the difference between what you pay now and will pay after and save it up for a few months to test your finances.  Can you live comfortably within the new limits?  If not, be honest with yourself and decrease what your mortgage will be.

{Remember Financial Goals}

Remember that you need to save for retirement and family vacations.  If you have other debt payments, make sure that you keep these in mind when you are figuring out how much home you can comfortably afford.

{Use this calculator to help you figure out how much home you can afford!}

Regency Homebuilders
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