A review of your assets and income versus your debt and monthly expenses will provide an estimate for how much mortgage loan you can get pre-qualified for. It will also help you find the right type of loan for yourself. A pre-qualification is the easiest one of two documents you can obtain to show the sellers that you are serious about your offer and financially capable. To have this document in your hands will save you a lot of time and enable you to move quickly should you find a home and wanted to make an offer. It helps you to focus on your price range and stay realistic to what you can afford.
Some sellers might require a pre-approved letter. This document is indications to weather you have the financial means to purchase his / her home. A pre-approval is a calculation done by a mortgage lender, which is the amount you will be able to finance through a loan and what your monthly payment will be.
How much home you can afford will depend your gross income, your available funds for down payment, closing costs and cash reserves required by the lender, your debt, your credit history, the type of mortgage you select, and current interest rates. Your first loan is very different than your second and refinancing your mortgage.
Owning your home is a great accomplishment, not to mention that it is a much wiser financial strategy. Having a mortgage will entitle you to get the tax refunds, rebates and deductions that you wouldn't have if you didn't own.
Thank you for reading. I hope you find this article informative. Please feel free to contact me or comment below with any thoughts.
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