Knowledge is power - if you know ahead of time how much of a home loan you can afford, you will save a lot of time and aggravation.
Ask your lender to help you find your price range.
Home buyers who know how much they are able to afford have a more successful and productive house hunting experience. When you identify exactly how much you can spend, you narrow down your potential home price range, which saves you time and effort during the search.
Talk to your lender and ask questions before you start looking at houses. This important step should be welcomed by your lender, who will explain that it's in your best interest to obtain a realistic and accurate price range for your particular home loan needs. Your lender will take a look at your personal credit rating and income to help you determine this range.
Ask about your 'true payment.' Consider the following components of what will you actually pay for each month:
Loan Principal Payment
Loan Interest Payment
Taxes
Insurance
Home Owners' Association Dues (possibly)
Online calculators are great tools for helping to figure out a simple mortgage payment, but often times they omit other elements that go into your 'true payment.' Likewise for many loan officers, who may offer you a lower payment, but it's often not the actual amount that comes out of pocket from you each month.
Ask questions - you have the right to know how much you can and will pay!
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