How Much House Can You Buy? | Financing

Determining how much you can afford before you begin your home search will save you valuable time.

Windermere Coeur d Alene Real Estate

Prequalification vs Preapproval

  • Prequalifying for a mortgage generally helps you determine how much house you can afford.
  • Most lenders require that your monthly mortgage payment, including principal, interest, taxes and insurance, range between 25 and 28 percent of your gross monthly income.
  • Remember, becoming prequalified does not necessarily mean that you will be approved for a loan of that amount.
  • Preapproval from your lender means that you have provided them with the necessary paperwork, and they have approved your actual loan amount.
  • Having preapproval for a home loan will put you in a much better negotiating position, because the seller knows that you are able to obtain your loan to purchase their home.

Down Payment

  • Many lenders require 5 to 20 percent down payment on your home
  • 25 percent down or more may qualify you for a lower interest rate

I can help you locate a lender who will assist you in finding a financing package that best meets your needs.

 

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