One of the most frequently asked questions our team receives is: How Much Home Can I Afford?
While we are not loan officers (and would be happy to recommend you to a local loan officer we trust to walk you through the mortgage application process), there is some simple math you can do to find out how much your house payment could be each month.
This can vary based on which municipality you live on, but in the West Michigan area, your mortgage payment will typically be about $6 for every $1000 you borrow. So, if you buy a $200,000 house, the math works out to: 200 x $6 = $1,200 per month.
A follow up question to “How Much Home Can I Afford?” is “How much income do I need to afford a $1,200 per month mortgage payment?” There are some regulations (depending on the lender) and personal guidelines you may want to consider, but our typical recommendation is that your house payment should be about 25% of your monthly income. (Note that this does not take into consideration any consumer debt payments you may have, your credit score, or any other budget factors you want to consider when buying a home).
Want to learn more? Watch this video as Paul explains the answers to both questions above:
If you have any further questions about this or would like to talk more about the buying or selling process, please reach out to our team by calling 616-730-1254 or emailing SREteam@SpicaRealEstate.com.