When you’re in the market for a new home, it may be tempting to try to buy the biggest or most expensive house that you can afford based on the number you find on your pre-approval letter. However, the loan amount you qualify for doesn’t necessarily represent how much house you can afford. Just because a mortgage lender is willing to give you a certain amount of money, doesn’t mean that you’ll be able to pay it back in the end.
If you’ve found a home that you like and want to know if you can afford it, you may have already tried to use a mortgage calculator online. Mortgage calculators can provide you with a quick answer to whether you can afford that house, but you need to be careful when using these online tools. You may not be receiving the right answer – or worse, you may not even have the correct information to plug in.
Instead of taking a leap and suffering for it later, read through these tips to determine how much house you can afford on your budget. With 22 years experience in both mortgage and real estate, I can help create a plan!
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