How Much Home Can I Afford? | Nestfully

How Much Home Can I Afford?

If you’re thinking of purchasing a home, this is probably one of the burning questions in your mind. And that’s a good thing! If you’re asking this question, you’re giving serious thought to what is one of the biggest purchases you’ll ever make—not just jumping in blind and hoping for a positiveoutcome. 



Financial Considerations


There are a number of factors that go into determining how much you can afford to pay on your mortgage loan each month, starting with the basics: household income, regular monthly expenses, credit profile, and savings you plan to put toward a down payment. But that’s not nearly the full picture. You don’t just want to exist in your new home—you want to live as comfortably as possible, without excessive financial stress that can come when you set your sights too high.



Follow the 28/36%Rule


Most financial advisers—and even the FDIC—are proponents of the28/36% rule, which recommends spending no more than 28% of your gross monthly income on home-related costs and no more than 36% on total debts. While this guideline is a good place to start, you’ll also want to consider the full scope of your financial situation and how your needs might change in the future.



Mortgage Loan Tips


  • Determine what type of loan is right for you. From conventional to VA to FHA, learn about the different mortgage loan types and terms. 


  • Compare rates from different lenders. Once you’ve figured out what type of loan you want, shop around for quotes from multiple lenders and choose the one that best suits your needs. 


  • Get preapproved.Not only does preapproval show sellers that you’re a serious buyer, but it also saves time once you make an offer.  



Use Nestfully’sMortgage Calculator


Once you’ve found a homeyou’re interested in, click on the listing and scroll down to the Mortgage Calculator for a quick estimate of what your monthly payment would be. You can adjust the down payment amount, interest rate, loan term, and purchase price, and even factor in property tax and homeownersinsurance to get a more accurate estimate.