If you’re thinking about buying a home in Midland but you’re not quite sure you could afford it, check out this list of signs that point in a favorable direction for you.
Could You Afford a House Today? Here Are 3 Signs
While you should definitely talk to a financial adviser before you make a major purchase like a home, there are a few signs that you might be able to swing your monthly mortgage payments and maintenance costs. Check out this list of signs that now may be a good (or at least feasible) time for you to purchase a home for sale in Midland:
- You bring in enough money through your salary to afford your rent.
- You have enough money saved to put down at least 3 percent
- Your credit score is over 620
Let’s take a closer look at each of these.
#1. You bring in enough money through your salary to afford your rent.
If you’re able to afford your rent with no problem, you shouldn’t have a problem coming up with the cash for a comparable mortgage payment. In many cases, there’s a simple way to figure out if you make enough money to afford a house:
- Multiply your annual income by 2.5
- Add your down payment amount to that figure
That’s the maximum mortgage payment you should shoot for. For example, if you make $50,000 per year and you have $5,000 in savings you could use as a down payment, you’d multiply that by 2.5:
$50,000 x 2.5 = $150,000
Then you’d add your down payment:
$150,000 + $5,000 = $155,000
The highest mortgage you should aim for is $155,000.
#2. You have enough money saved to put down at least 3 percent
If you can put down at least 3 percent as a down payment, there’s probably a mortgage product for you. While it’s usually better to put down as much as possible, the days where you needed 20 percent are long gone.
#3. Your credit score is over 620
Most lenders require you to have a certain credit score to qualify for a mortgage. If your score is at least 620, you should be in pretty good shape. Naturally, the higher it is, the better terms and rates you’ll qualify for – but you’re not near the FHA cutoff (which is 580) with a score of 620.
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