Shorewest Shares: How Much Home Should You Buy

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So… you want to buy a home?

Buying a home is one of the biggest purchases in your life — knowing exactly how much home to purchase can be complicated. To choose the right home, you have to try to see as far into the future as possible and predict:

  • How long you will live in the home?
  • How large your family will grow?
  • What activities will you have, with space requirements?
  • Where do you want to live — near work, near family, near a certain school district?

The trick to buying a home is getting as much as you can on your wish list that you can also afford. You don’t want to max out your spending ability so you can no longer afford anything but your mortgage payment.

To qualify for a 30-year fixed rate conforming loan, that is also federally insured, your income to mortgage debt can be no higher than 29% of your gross annual income, and your debts plus mortgage payment can be no higher than 41% of your gross monthly income, according to the Federal Housing Administration.

For example, if you make $3,000 gross income per month, under a conforming loan standard, your house payment (principal, interest, insurance and taxes) should be no larger than $870.

Before you consider buying a home, it’s a good idea to check your debt and have three to six months of expenses saved, in addition to your down payment. Some questions to consider:

  • Can I make at least a 10% (preferably a 20%) down payment?
  • Can I keep house payments at or below 25% of my monthly take-home pay?
  • Can I afford to take out a 15-year or 30-year loan?
  • Am I working closely with a real estate agent I can trust?

When you’re ready to see how much home you can afford, call your Mortgage Lender with Wisconsin Mortgage Corporation. A trusted source in your buying process, Wisconsin Mortgage Corporation can help you finance your dream home.

Ready to start your search for your next home? Contact a Shorewest agent to help you start the process.



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Categories: Home Buying

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