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How Much House Can I Afford?

This tends to be a recurring question that I receive among first time home buyers or individuals who are simply curious to whether they can consider owning a home. Below is a high-level overview just to get your wheels turning on this topic.

Down Payment

The amount of down payment you would need to put down depends on the loan type. Overall, the larger your down payment, the more house you can afford and more competitive you are as a buyer. You do not necessarily need 20 percent down to qualify for a mortgage, again, depending on the loan type.

Credit Score

Having a low credit score does not automatically indicate that you will not qualify for a mortgage but it does have an impact on how a lender may view you. Obviously, the higher your score, the better off you are and there are ways to fix your credit score. The first thing I would recommend is getting a copy of your full credit report and review what information is on there that would or could impact your lending capability.

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Existing Debt

A lender will consider your debt-to-income ratio when considering how much house you can afford. Overall they consider how much of your gross monthly income goes to your monthly debt. Each lender is different in that their percentages for these ratios vary slightly so your lending abilities can be a little different. If you are considering buying a house, you might consider holding off on adding any more monthly debt so that you may quality for more house.


There is a home out there for every income level as income is the starting point for how much house you can afford on a monthly bases. It may not initially be your dream home, however look at it as your vehicle to your ideal home as you continue to build equity. You personally have to weigh the difference in owning vs. renting and what makes sense or is right for you.

Loan Term/Type

There are many different loan types and terms out there for all types of income and life situations. The big take away here is to not think you only have one or two options, but to go do your research as lenders are always offering different incentives. Make sure you consider all your options, especially if you are a first time home buyer.

Please feel free to reach out to me if you have any questions or concerns as I’m happy to offer my assistance in starting your home buying process.

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