Carter here with Century 21 Affiliated, and today we’re going to be discussing, how much house can I afford in the Appleton, Wisconsin area or anywhere throughout the Fox Valley? If you’re reading this blog, there’s a good chance that you might be a first time home buyer looking to buy your first house. You’re probably wondering, how did they figure out how much house I can afford?
Who Dictates House Price?
Your mortgage lender or banker will have the say on how expensive of a home you can purchase. They are going to plug in all your income, your debts, your credit history, everything into their system, and it’s going to spit back a number that states how much you can afford. Lending institutions have a risk meter they need to abide by, & that is what will dictate if they can give you a loan & for how much. Typically, mortgage lenders are more flexible vs your local bank or credit union.
Can I Go Above my Pre Approved Amount?
I would HIGHLY recommend that you stay below what you are pre-approved for. Although the lender might tell you that you could go up an extra couple thousand dollars it might not be worth it. This could put you in a bind financially if something were to ever come up. Of course, they might have some leeway with this number but when it’s all said and done, that number is going to dictate what you can pay for a monthly basis for a mortgage. That includes taxes, insurance, utilities, all the other expenses associated with the home.
If you decide to go significantly higher than your pre-approval the mortgage lender will deny the loan. (Example: You offer $120,000 when you’re only approved for $100,000)
To make the home buying process go as smooth as possible you will also want to tell your real estate agent how much house you can afford. This will help them when they are searching for properties for you.
The Next Step…
If you’re reading this blog post, and trying to figure out how much house you can afford I would first recommend speaking with a lender. If you don’t know who to go with I would recommend reaching out to Jesse Koch at Inlanta Mortgage. Jesse does an amazing job & they offer several different loan programs you can go with.
After you fill out the loan application you’ll have a number that you can go off of for a pre-approval price. This number could differ from the rent amount that you currently pay. You might pay more in rent than you would for a mortgage and you might not qualify for a mortgage as expensive as your current rent. It’s just something to take into consideration.
Of course, things differ and it depends upon, like I said before, your credit score, your debt to income ratios, your credit report in total, and how much you can, income you’re actually bringing in. If you have questions, or need help in finding your first home, fill out the form down below. If you need assistance in buying your first house, or if you just want to chat about the process, feel free to call. Text me at 920-252-2864.