Mortgage Resource Center

What Can You Afford?

How much home can you afford? Review your income, savings, and debt to figure out how much home you can afford.

How Much Can You Afford?

Now that you know what you're looking for, the next step is figuring out what type of home you can afford. A review of your income, savings, monthly expenses and debt will be necessary.

Early in the process, you'll want to get pre-qualified for a mortgage loan. It enables you to move swiftly when you find the right home, especially when there are other interested buyers. It also indicates to the seller that you are serious and can afford to buy the property. A pre-approval is a simple calculation done by a mortgage lender that tells you the amount you'll be able to finance through a loan and what your monthly payment will be.

The price you can afford to pay for a home will depend on several factors, such as:

  • Gross income
  • The funds you have available for the down payment, closing costs and cash reserves required by the lender
  • Your debt
  • Your credit history
  • The type of mortgage you select
  • Current interest rates

Another figure that lenders use to evaluate how much you can afford is the housing expense-to-income ratio. It is determined by calculating your projected monthly housing expense, which consists of the principal and interest payment, property tax payments and insurance premiums on your new home loan (also known as PITI).

Each buyer is unique, and a mortgage professional can help you find out just what you can afford. Your income and debts will typically play the biggest roles in determining your price range. It's simple to make an estimate. Contact an Agent to refer you to a trusted Mortgage Broker in your area.

Making An Offer

Making an offer to purchase a home  has its own set of factors. Rely on a CENTURY 21 Affiliated Agent’s experience and knowledge to make a successful home buying offer.
 
Making a Home Buying Offer

Once you’ve found your ideal house, it’s time to get started with the financial and contractual side of the purchase. Let your CENTURY 21® professional guide you through this process. Purchase contracts vary in length and terms from state to state, and sometimes within a state.

Multiple offers on the same home are not uncommon, so you may only get one chance to make an offer that the seller will consider. That's why it's important to think carefully about your strategy. In most cases it is better to have your real estate professional present the offer. If you have any personal interaction with the homeowner, avoid sharing any information about your move, your current housing status, financial status or your feelings about their property - positive or negative. This could work against you in future negotiations.

TIP: You and the seller have different goals, so it’s important to consult with your CENTURY 21® Affiliated Agent. He or she can bring order to the process, and will know what questions to ask to help you reach a desirable outcome.