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Providing valuable resources for our Langley, White Rock and Surrey Real Estate Buyers and Sellers is our top priority.
Now that you have made the decision to buy, it is important to figure out what you can buy.
Lenders will look at your current budget (income, assets, and debts), and how much you would like to down pay and calculate two ratios to determine how much they are willing to lend. The first ratio sets a limit on what they think you can spend on housing.
For example, a 28% housing ratio means your
projected housing cost should be less than 28% of your gross monthly
income. These numbers are all flexible depending on your down payment.
Generally, the bigger your down payment, the less your monthly payment
will be. People can usually afford a house 2.5-3 times their gross
annual income. The second ratio compares monthly debt obligations to
monthly income.
After all this is calculated, you can get pre-approved for a loan. This
will tell you officially how much you can afford and what your monthly
payments will be. Also, this tells the seller you can afford to buy
their home. Often buyers can use their pre-approved status as leverage
during negotiations.
Questions about Langley, White Rock and Surrey Real Estate?
Ask us below or Call us Now at 778.862.5542
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Last Updated ( Tuesday, 29 July 2008 )
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