One of the first things you should do if you’re considering a home purchase is to find out how much you can afford. Keep in mind, a lender will tell you how much your maximum is. In most cases, I would suggest buying based on what you need and not what you can afford.
In the financial planning world, the general recommendation is to limit your housing ratio 1 to 28%. Housing ratio 1 is housing expenses ([PITI + HOA/condo fees]/gross pay). For example, if your household income is $120,000/yr($10,000/month), you would want to keep your house payment under $2,800/month.
You may also want to consider housing ratio 2. The general recommendation is to keep this under 36%. This is the total of housing expenses plus any installment payments (credit cards, auto loans, student loans) divided by gross pay. Continuing with the example above, if you had a household income of $120,000 ($10,000/month), you’d want to keep your total debt payments under $3,600.
If you have no debt, then you may be comfortable with an allocation of 36% of gross pay to housing. However, buy what you need. It’s nice to have some margin at the end of the month.
Here are some loan officers you can contact for rates/fees.
Sylvia Bae | Senior Loan Officer
M 571-251-9854 F 571-303-0166
E sbae@fhmtg.com W www.baeteam.com
A 3201 Jermantown Rd, Suite 800 | Fairfax, VA 22030
Michael Lee | Loan Officer
(703) 489-8256
mlee@mapleavenuehomeloans.
mapleavenuehomeloans.com