When you meet with your lender, consider your lifestyle and spending patterns and leave a little room for the unexpected (repairs, landscaping, furnishings, etc.). The lender’s decisions are based on formulas- historically, banks use a ratio called 28/36 to decide how much you can borrow. An approved housing payment couldn’t be more than 28% of the buyer’s gross monthly income, and his or her total debt load couldn’t be more than 36%. As home prices have risen, some lenders have stretched ratios as high as 50%. No matter how expensive your market, we urge you to think carefully before stretching your budget so much.
Deciding on how much you can afford should involve careful consideration of your financial profile and lifestyle. In the long run, your own peace of mind will matter most.
Your real estate agent is the best source of information about the local community and real estate topics. Give Jackie Ruden Realty Team a call today at 435-272-7710 to learn more about local areas, discuss selling a house, or tour available homes for sale.