Aim for a Mortgage Budget You Can Comfortably Afford
When it comes to buying a home, one of the first things Gresham locals should do is find out just how much of a home they can afford. The overall cost of the home you hope to buy will determine how much you need to qualify for on your mortgage loan and how much of a down payment you’ll need to have saved. Gresham home buyers should figure out how much of a mortgage they can afford before looking for a home. Better to know what your budget is and stick to it rather than get your hopes up for a house that is over your limit.
The 28/36% Rule
Most financial advisers agree that people should spend no more than 28 percent of their gross monthly income on housing expenses and no more than 36 percent on total debt. That includes housing as well as things like student loans, car expenses, and credit card payments. The 28/36 percent rule is the tried-and-true home affordability rule that establishes a baseline for what you can afford to pay every month.
Calculate Your Income and Expenses
To figure out how much of a mortgage payment you can afford, follow these steps:
- Figure out how much you (and your partner or co-buyer, if applicable) earn each month. Include all revenue streams, from alimony and investment profits to rental earnings.
- Then, list out all housing costs and your total down payment. Include annual property tax, homeowner’s insurance costs, estimated mortgage interest rate, and the loan terms. The popular choice is 30 years, but some people opt for shorter loans.
- Lastly, tally up your expenses. This is all the money that goes out on a monthly basis. Be accurate about how much you spend, as this will dictate what you can reasonably afford.
Once you know all of your income and debt, you’ll be able to figure out how much you can afford to put towards mortgage and housing payments each month. With Stonebridge Mortgage Group’s mortgage calculator, you can then figure out what your monthly payment on a house would be based on the total cost and your down payment. Gresham home buyers should remember that staying within budget is always the best choice. Stretching your funds too thin can lead to financial disaster. Gresham home buyers who need further advice on mortgages can rely on Stonebridge Mortgage Group.
Stonebridge Mortgage Group Offers Guidance on All Mortgage Matters
For a professional who can assist you with mortgages and related services, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the entire home buying process. We help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and is located in Gresham, Oregon. Don’t wait to get assistance with buying your first home! Call Stonebridge Mortgage Group.
Call us today at 503.661.5580