Factors to consider when deciding if you're ready for a mortgage

by Carolyn Kay 03/12/2023

Factors to consider when deciding if you're ready for a mortgage featured image

As you enter the world of real estate, funding for your next home purchase stands on the forefront of the homebuying process. Understanding what you can afford may help you in starting your journey to find your next abode.

What factors determine how much house can I afford?

To figure out your finances to determine how much home you can afford, consider these factors:

Money you have saved up for a down payment and closing costs.
Your monthly income, including your salary and from other sources.
The debt you’ve accrued.

The 28/36 rule - what it is & how it works

If you’d like to use a system to manage your finances, consider utilizing the 28/36 rule. With this method, you dedicate no more than 28 percent of your gross monthly income to household expenses such as utilities and mortgage payments. Your debt shouldn’t take over 36 percent of your gross income.

Using this system helps you manage debts and financial duties, and demonstrates to mortgage lenders you can afford a monthly mortgage payment.

Should I buy a house?

Before starting the home buying journey, it’s ideal to consider your overall standing to make sure you’re ready to purchase a home.

Consider your credit score - a higher credit score may spell approval from more lenders and lower interest rates. Do you have adequate cash reserved to afford a down payment, closing costs and other fees associated with buying a home? By answering these questions you’ll get a better idea if homeownership is feasible in the near future.

Purchasing a home takes effort and much consideration, so take your time during the process and figure out your finances to jumpstart your journey.

Mortgage Requirements

Mortgage Approval

Homebuying

About the Author

Carolyn Kay

As a Real Estate professional, I specialize in helping my clients buy, rent or sell properties in Westchester County. I am passionate, dedicated and committed to my clients and my first priority is to provide them with first class service and guidance throughout the entire process. It has been said that I go above and beyond for my clients to get the deal closed! I have experience working with clients who have financed their purchases with either a conventional, VA or FHA loan and have a good understanding of how they work; no sale is too big or too small for me to take on. My family and I relocated to England for 2 ½ years, this was a wonderful experience but at the same time, it was overwhelming. I have first hand knowledge of the challenges as well as the positives in discovering a new community. I was born and raised in Scarsdale and once married, my husband and I decided to raise our two daughters here. Both of our daughters successfully graduated from the Scarsdale schools and are both married, living and working in Manhattan. After living in the same house for 30 years my husband and I took the leap, sold our home and bought and renovated a condo townhouse in another town. Once again we are discovering a new community and fully understand the highs and lows of selling a home we loved and buying and making a new home. I feel that my personal real estate experiences have made me more in tune with my client’s needs and therefore better able to help them navigate through the complex process. Please call me so that I can put my knowledge and experience to work for you.