Home Buying
Besides deciding if you want a single home, duplex, condo, townhouse or the many different types of homes in Bloomington MN, the biggest stress is deciding whether or not you can afford a home. Although buying a home can be a daunting task, knowing what you can afford can eliminate some of the stress of finding homes for sale. Rather than thinking “how much of a mortgage can I pay” it is better to think, “how much home can I afford”. Knowing the maximum amount you can spend on a house, duplex, or townhouse will help you to not over or under spend.
A general way to estimate how much you can afford is to triple your yearly income. This is assuming that you have a 20% down payment and that you have moderate to low debt. If you have no debt and a 20% down payment you can multiply your yearly salary four times to find out how much home you can afford.
One of the biggest keys is to make sure that you have a down payment first. A typical down payment is 10% or more of the purchase price to the home. The larger your down payment is means you are more likely to receive a larger loan for your home. It is also important to remember about closing costs when you are calculating how much you are going to put down. This money either needs to be taken from your down payment, or added to your loan.
Make sure to check out the Mortgage and Loan Calculator to help you see how much home you can afford.
