How Much House Can I Afford? 5 Factors To Consider

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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.

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

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

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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.

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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.

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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.

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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.

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