Buyer’s Purchasing Power

Cherrie & Zach
Cherrie & Zach
Published on November 9, 2017
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Buying a home can be financially straining on any family. As interest rates increase, buyers are less likely to qualify for high dollar loans, and will be paying more in interest. Applying for a mortgage when rates are low allows buyers to qualify to get more money, and pay less in interest each month. To calculate a good estimation of what you can get approved for, just take your monthly gross income, subtract your debts (ie. car payments, credit card debt, health insurance, etc.), then multiply by 43%. Meaning if you make $6,000 a month before taxes, and you spend about $1,000 in monthly expenses, you will land in about the $2,150 mortgage payment range. If interest rates are at 3.75%, you would most likely qualify for $462,500 loan! Not bad. But if interest rates are at 5.00%, you will only qualify for a $400,000 loan.  If you want a more detailed breakdown, check out a mortgage calculator here. It is a great time to move into the home of your dreams when rates are low! 

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Buyer’s Purchasing Power
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