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One of the first questions a home buyer should ask is, "How much can I afford?" From the beginning of the process, knowing your loan limits can save you from some negative experiences:

Pre-Qualification Saves You From:

• Wasting Time - looking at what you can't afford
• Building up False Expectations - ending in discouragement
• Falling in Love...with the wrong house
• Making the Process Longer than Necessary
• Getting an Unrealistic Financial Picture

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The very best Ratio,
According to most lenders, is to have roughly 1/4 of your net income going towards house payments. Anywhere between 25% and 32% is recommended.

Remember:
A pre-qualification from a local lender is the only way to know exactly what you can afford. Doing your own calculations is only useful for getting a general idea.

Conservative or Not?

With a conservative 25% to 28% of your take-home income going towards your mortgage, you insulate yourself from emergencies. You leave a margin.

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On the other hand...
if you expect upward movement in your income, stretching yourself to your maximum loan amount is not necessarily a bad strategy.

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Remember Other Costs...

• Homeowners Insurance
• Average Home Repairs
• HOA Fees
• Taxes
• Utilities

Example of Home Expenses

Consider

• What you can afford is one thing...
• What is comfortable may be another
• Practice living on the amount that is left...
• After a mortgage payment
• Remember your tax write-off 

Education is Power

An Educated Consumer
makes the best decisions.
Contact us for your own "personal home buyer's seminar."
Chris Highland
301-401-5119

The Highland Group

Associates at
Turning Point Real Estate
8923 Fingerboard Road
Frederick Md 21704
301-831-9947