Wondering how much house you can afford

Quiz time!

the best way to know how much home you can buy is

A) Go to Zillow and put the numbers into their calculator

B) Ask your friends and family what their payment is.

C) Find the house and hope you’ll qualify

D) Meet with a lender and find out what the cost involved are and what the full payment will be, including principle,  interest, taxes and insurance,  You may need to add in HOA fees and possible leasing fees like a solar lease.

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✅ What People Need to Know Before Getting a Home Loan

1. Credit Score & History

• Lenders check credit to see how responsibly you manage debt.

• Higher scores = better interest rates.

• Review your credit report for errors before applying.

2. Income & Employment

• Stable, verifiable income is crucial (usually 2 years of consistent work history).

• Pay stubs, W-2s, and tax returns are often required.

3. Debt-to-Income Ratio (DTI)

• Lenders compare your monthly debts (car, credit cards, loans) to your income.

• Aim for under 43% (lower is better).

4. Down Payment

• Traditional loans often want 20%, but many programs allow 3–5%.

• FHA, VA, and USDA loans may offer low or even zero down payment options.

5. Loan Types

• Conventional: Flexible, but credit and down payment requirements are stricter.

• FHA: Easier qualifications, lower down payment.

• VA: For veterans, with no down payment.

• USDA: Rural areas, no down payment.

6. Closing Costs

• Typically 2–5% of the purchase price.

• Can sometimes be negotiated with sellers or covered by lender credits.

7. Pre-Approval vs. Pre-Qualification

• Pre-Qualification: A quick estimate based on self-reported info.

• Pre-Approval: Verified with documents, shows sellers you’re serious.

8. Documentation You’ll Need

• Pay stubs, W-2s, tax returns.

• Bank statements.

• ID and proof of funds for down payment.

9. Interest Rates & Loan Terms

• Rates fluctuate daily—locking in at the right time matters.

• Consider fixed vs. adjustable rate loans depending on long-term plans.

10. Extra Considerations

• Save an emergency cushion (don’t drain everything into the down payment).

• Don’t open new credit cards, make big purchases, or change jobs before closing.