How Much Home Can You Afford?
When it comes to buying a home or property, one of the first questions that comes to mind is,”How much home can you afford?” The answer to this question is impacted by a variety of different factors that need to be incorporated. Some of these factors include the size of the down payment your willing to make, desired monthly payment amount and the maximum amount you get approved to borrow.
Unfortunately, there are no black and white answers to these questions. If you are willing to be flexible regarding loan options, loan term and initial down payment then chances are, we can help lock in the loan program that is right for your budget. For example, if you plan on extending your payments throughout a 30 year mortgage, you can probably make a lower down payment (or perhaps no down payment at all) and still manage the monthly payments. If, on the other hand, you prefer to make less payments with a 15 year mortgage, you’ll probably need to make a larger down payment to keep your monthly payments in line with what you can afford. It all comes down to give and take.
What Size Down Payment Should I Make?
Determining how much you will need to put toward a down payment depends on the loan program requirements, credit worthiness, and your desired monthly payment. In some cases, you can obtain a home loan without having to make an down payment. If a down payment is needed, there are several funding sources available that can be used to help make your payment.
Cash in Hand
A Gift from Family or Friends
Down Payment Assistant Programs
When it comes to making a down payment, many buyers look at their cash on hand as their only source for their down payment. The good news is there are more options available to you.
Another way to fund or partially fund a down payment is by using a gift. Buying a home is a big step, which is why parents, grandparents and other family members are often eager to help by offering a cash gift toward the purchase of your home.
There are down payment assistance programs and charities that offer grants and other kinds of financial support for your down payment. Here is a list of some of these resources that offer mortgage assistance for home buyers in Colorado:
- DOLA Down Payment Assistance
- Metro Mortgage Assistance Plus Program
- Turnkey Mortgage Program
- CHFA Down Payment Assistance Grant
Although there is no magic solution, we can help you explore all your down payment options, including low down payment and 100% mortgage financing options that might be right for you.
What Mortgage Payment Can I Afford?
When determining what size monthly payment you can afford, you’ll want to consider how much money you are bringing in and expenses you already have. Common expenses that should be considered are car payments, student loans, credit card payments, and utility bills that all play a role in the monthly payment amount you can afford.
There are also lifestyle expenses that include dining out, clothing, groceries and travel expenses that you will want to consider. Everyone’s lifestyle expenses are a little different and weighed with varying levels of importance. Are you willing and able to cut back on some of your expenses in order to afford a larger monthly payment? How might you adjust your spending habits so you can afford a monthly mortgage payment? These will be the questions you may have to consider if becoming a home owner is on the top of your list!
How Much Can I Borrow?
Getting pre-qualified for a mortgage loan is the first step to understanding how much home you can afford. This question is better answered as early on as possible. Once you are approved for a specific loan amount, you can begin your home search with confidence and increase the likelihood of being appraised. Our loan officers are here to help make this process as easy as possible and educate you every step along the way. Our mortgage payment calculator will help you see how your down payment, monthly payment and the amount you borrow are all interrelated.
We are here to answer any questions you may have about the mortgage process. But the best way we can help is by getting you pre-qualified for a mortgage loan. To get started, simply complete the form below to let us know a good time to contact you. We look forward to helping you buy your dream home.