If you’re buying a home for the first time, you know there’s a lot to think about! One, naturally, is your monthly budget. Lenders call the amount that a homeowner can comfortably make on monthly payments “home affordability.” This number is calculated as the housing expense ratio, which includes housing expenses as a percentage of pre-tax income. The rate is typically 28 percent or less. Lenders also evaluate your total expenses, which are your housing expenses along with your monthly obligations. If you’re trying to set a budget, be aware that lenders sometimes bend the rules to give homeowners a mortgage that they ultimately can’t pay. However, experienced mortgage brokers Las Vegas can help you find a mortgage and budget that works for you. 

 

How to Prepare a Budget 

Sometimes, people are tempted to purchase a home that is more expensive than what they can actually afford. Of all first-time homebuyers, millennials are particularly prone to underestimating housing expenses. Fortunately, experts offer tips to help you set a limit for housing costs. The first step is calculating total gross employment income. Don’t include bonuses and overtime, as those payments aren’t considered regular or predictable by a lender. Next, add up your obligatory debts such as student loans and car loans. If you’re not sure what you pay each month in loans, look at a credit card or bank statement to get an idea of your average monthly totals. Lastly, look at your current housing payments, such as mortgage or rent, along with their associated insurance and tax rates, to determine what you can comfortably spend moving forward. 

 

Check Your Credit 

As you’re figuring out a monthly budget for your mortgage, it’s a good idea to check your credit score. In the eyes of a lender, a low credit score often means you’re considered a risk for loans. Consequently, you’ll face higher interest rates and a higher overall rate. Having a credit score of 650 versus 750, for instance, can add .5 percent to your loan rate, which adds up quickly. If you have a low credit rating, you may be eligible for FHA home loans Las Vegas. 

 

Evaluate the Market 

After establishing a budget, experts recommend keeping an eye on the local real estate market. Staying informed of nearby home prices (including historic rates) gives you an idea of whether or not you are living in an affordable area. 

If you’re a first-time home buyer in the Las Vegas area, we are here to help! Our team of top-notch mortgage brokers Las Vegas is committed to exceptional customer service and personalized assistance. It’s our goal to make purchasing a home a relaxed and enjoyable experience. From introducing you to the loan process to helping you shop for competitive rates, we gladly handle all aspects of securing a loan. Contact us today to learn more by calling or visiting our website: https://drennenhomeloans.com/.