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It
is important to know how much you can afford before
you begin looking at homes.
You should also talk with a lender
in order to be pre-approved for a loan. This puts
you in a stronger negotiating position with a
seller.
As a rule, your monthly housing
costs should not be more than 28% of your monthly
pre-tax income, including the mortgage payment
insurance.
If you have long-term debts, such
as student loans or car payments, your monthly
payments, including your housing costs, should
be less than 36% of your pre-tax monthly income.
Some loans are more flexible with
these basic guidelines. Depending on which type
of mortgage you select, you can consider houses
in various price ranges.
An adjustable-rate mortgage will
usually enable you to qualify for a higher loan
amount. We can help you make the basic calculations.
And remember, buying at the top
end of your price range gives you more time to
outgrow your home, and can save you money in the
long run.
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