When you are looking to make a real estate transaction, the first step is to always figure out how much you can afford to spend and how much you can finance.. There are a lot of factors that go into it, but most people qualify for a mortgage that adds up to less than 36% of their monthly income for principal, interest, insurance, and taxes (aka a Debt-to-income ratio of 36). That being said, you should speak to a mortgage professional and get pre-approved for an amount.
The important thing to remember is that personal timing is more key than market timing. When looking for a mortgage, you have to make sure you’re financially sound and able to handle a mortgage. Figuring out what could happen in the future is less important than making sure you’re able to handle a variety of possibilities.
Consider how much of a down payment you can make. In addition, figure out a timeline to building your savings and any debts you can tackle before applying for a mortgage. Typically a mortgage lender will want your total monthly debt payments—which includes taxes, homeowner’s insurance, and private mortgage insurance—to be less than 36% of your gross monthly income.
Housing trends can change over time and regularly and can be tied to specific neighborhoods. Make sure you connect with a real estate agent who can connect you to local market trends. Key areas you should consider before getting a mortgage should include
In addition to speaking with a real estate agent, you should also speak with a mortgage broker. Having a pre-approval letter (which is better than a pre-qualification letter) will enable you to make stronger offers on homes.
The Kern Team is ready to help you transition to your new home. Finding the right home is only half the journey. Our team of award-winning experts can help make sure the journey is as rewarding as possible.
Give us a call to schedule a conversation today.