How Much House Can I Afford? 5 Factors To Consider

How much house can I afford? That is a question many home-buyers ask themselves when they are in the process of buying a new home.

 You must take the time to define a budget and carefully evaluate your financial situation before you start looking for your new home.

The first step in calculating how much house you can afford is determining the size of your down payment on the house.

How Much Down Payment Do I Need To Buy a House?

There are several types of mortgages, including 30-year fixed-rate loans, 15-year fixed-rate loans, and adjustable-rate mortgages, where the interest rate changes after every 3 to 5 years.

A debt-to-income ratio greater than 36% is considered high-risk for lenders and may make it difficult for you to get the best interest rate.

What Numbers and Ratios are Important to Mortgage Lenders?

In addition to your down payment, you will also need to pay closing costs. You may also have to pay appraisal fees and additional fees required by state law.

The last step in calculating how much house you can afford is considering other factors such as property taxes and homeowners insurance rates in your area.