Deciding how much house you can afford
Your lender decides how much money you can borrow but you decide what you can afford. Lenders are careful. They make qualification decisions based on averages and formulas. They don't understand the nuances of your lifestyle requirements and spending patterns as well as you do.
Historically, banks use a debt to income ratio to decide the amount they will be willing to lend. This ratio is based on you spending no more than 28% of your monthly budget on your mortgage payment and spending no more than 36% of your budget on your mortgage plus any debts that last over one year, like car payments, student loans and credit card payments. As home prices have risen, some lenders have responded by stretching the mortgage plus debt ratio (called a back-end ratio) to as high as 50 percent.
It is worth considering not buying to the top of your ability to purchase. In the long run, your own peace of mind and security is what should matter most. You might also consider leaving funds to pay for such items as buying furnishings, redoing landscaping and completing repairs after closing escrow. Deciding how much you can afford should also involve some careful attention to how your financial profile will change in the upcoming years
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Helping you determine the best home loan program that suits your financial needs is my top priority as a Loan Officer at Banc Home Loans.
Bank Home Loans is a direct lender with a wide range of loan types to assist you with your first home purchase, move up or refinance needs. Our highly experienced and professional staff, combined with our strong industry relationships, provides me the ability to find the very best program to suit your home financing needs.
Working as a Mortgage Banker and a Mortgage Broker gives me the opportunity to offer all my clients in California the loan program they are seeking with the most competitive mortgage rates available. With 20+ years of experience, you can be certain that we will delve into what your housing and mortgage needs are, and that you will be offered several loan options to consider as everyone’s needs are unique. You will learn the pros and cons of each loan program available to you and by the time the process is done, you will not only be much more informed about what the lenders are offering, you will feel comfortable about the decision you made.
For over 20 years I have been turning home ownership from a dream into reality. The key to a great home buying experience is the lender you choose. As a mortgage adviser, I am dedicated to helping you make the most informed mortgage decision possible while taking care of your needs every step of the way. Whether you are building a foundation for your future, growing a family, moving to a new area, or simply want to refinance, I have a mortgage opportunity for every stage in your life. Together we can achieve the best possible outcome with your mortgage needs.