Wednesday, November 24, 2021 / by Jordan LaFond
As you think about making a home purchase, whether it is your first home or one of many, you need to consider what type of home you can afford. Most homebuyers choose to finance a portion of their purchase since many Americans do not have the cash to buy a home outright. From market dynamics to interest rates, many factors contribute to the type of home you can finance. So, what exactly is buying power? Buying power at its roots is the available money you have each month to put toward a mortgage after your other debts have been paid off (i.e. car loans, student loans, rent, etc.) Keep in mind that your buying power focuses on more than just the sale price; you also need to factor in taxes, insurance, repairs, and other expenses related to owning a home.
Determining Your Buyer Power
Determining what you can afford from a lending perspective is based on many considerations. Gross income, debt, assets, credit score, and interest rates are the key factors your lender will look ; ...