Written by Jon Long on July 31st, 2020
How much money do you need to buy a home? The answer depends on many factors. Today I’m going to walk you through what you need to answer the question, "how much house can I afford".
1. Monthly payment. You must consider five components into your monthly payment: principal, interest, taxes, insurance, and sometimes HOA (Home Owners Association). What are you comfortable paying every month? Ask how much mortgage can I afford and Stick to that budget.
2. Consider what you need. What are you looking for in a home? How many bedrooms, how much square footage, and so on. Determine what you’re looking for in your new home and that will help decide the price range for the properties you’ll be looking at.
“My recommendation is to get pre-qualified by a lender.”
3. Price range. Where do the previous two factors put you in terms of home price ranges?
4. Down payment. Determine what you can put down on the home. For example, if you’re looking for a 3-bedroom, 1,500-square-foot, single-family residence in North Orange County, those criteria would put you in the range of $650,000 to $700,000.
All these elements are particular to every buyer in every price range. My recommendation is to get pre-qualified by a lender. You don’t necessarily have to get pre-qualified right before you purchase a home. In fact, it’s advantageous to get pre-qualified in advance, even a year beforehand, just to see where you stand. This way, you can see what you need to work on to be where you want to be when the time comes to buy.
If you have any questions, "need a how much home can I afford calculator", would like to get pre-qualified by one of our recommended lenders please reach out to us, we would love to help you.