How much you can afford depends on interest rates, how much debt you're carrying, and how much you have to put down on a home.
If interest rates are around 10 percent, you have no other debt, and you have 20 percent in cash for a down payment, you can buy a home for about 2 to 2 1/2 times your gross annual income. If interest rates are at 8 percent, you can spend perhaps 3 to 3 1/2 times your income. If interest rates fall below that, the numbers get even better.
The easiest thing in the world to do is pay a visit to a local lender and get pre-qualified or pre-approved for your home loan. Or, you can click onto our mortgage calculator and get a sense of how much you can afford to spend.
Being pre-qualified means you tell your lender how much you earn, how much you owe, and what you have in cash and assets. Being pre-approved means your lender has verified your information, pulled a credit report, and committed to fund your loan should it appraise out in value. |
