Deciding How Much House You Can Afford                                  BACK To Real Estate Tips

Your lender decides what you can borrow but you decide what you can afford.  The PURTEE Team website makes it easier than ever to apply for a loan and get multiple options!  Click Here To Get Competitive Mortgage Rates!

Today's credit crunch has made financing a very important part of the buying decision. Lenders are careful, but they make qualification decisions based on averages and formulas. They won’t understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected – for all the new opportunities your home will give you to spend money, from furnishings, to landscaping, to repairs.

Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn’t be more than 28 percent of the buyer’s gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn’t be more than 36 percent. (In Canada lenders apply similar formulas to determine how much a buyer can afford. The Gross Debt Service ratio, or GDS, is not to exceed 32 percent of the buyer’s gross monthly income, and the Total Debt Service ration, or TDS, is not to exceed 40 percent of the buyer’s total debt load.) As home prices have risen, some lenders have responded by stretching these rations to as high as 50 percent. No matter how expensive your market though, we urge you to think carefully before stretching your budget quite so much.

 

1. Area Selection: City 2. Housing Information: Price Range? - Select an Option - $0 to $50,000 $50,000 to $100,000 $100,000 to $150,000 $150,000 to $250,000 $250,000 to $350,000 $350,000 to $500,000 $500,000 to $1,000,000 Over $1,000,000 Type of home? - Select an Option - Condominium Other Single family Town house Size of home? - Select an Option - 1,000 to 2,000 sq. ft. 2,000 to 3,000 sq. ft. 3,000 to 3,500 sq. ft. over 3500 sq. ft. Bedrooms? - Select an Option - Two bedrooms Three bedrooms Four bedrooms Five bedrooms Bathrooms? - Select an Option - Two bathrooms Three bathrooms Four bathrooms Desired school nearby? - Select an Option - Elementary High school Middle school Age of house? - Select an Option - Older than 10 years Under 10 years Under 5 years When to purchase? - Select an Option - Immediately Undecided Within 1 year Within 2 months Within 6 months Need to sell your present home? - Select an Option - No Yes Prequalified by lender? - Select an Option - No Yes More information on financing? - Select an Option - No Yes 3. Contact Information: Your name: Your e-mail address: Your phone number: When should I contact you? - Select an Option - Please call daytime Please call eveningtime What would be the best time(s) to reach you? Are you currently working with another Realtor®? No Yes 4. Please mail a personalized MLS list of homes in my Postal Address: State: Zip: Any extra comments, or specifics you would like to add:

Enter the code in the field below:

Refresh