Are you excited to buy the perfect home for your family? If you are going through the effort to purchase a home and move to a new neighborhood, then it makes sense to maximize your results. So, you need to consider the strength of your buying power, helping you get into the home of your dreams. Understanding your finances will help you find a beautiful home with a mortgage to match your budget.
Before you start looking at homes, we always suggest that you meet with a mortgage professional for pre-approval. This information can give you a clear understanding of the options that are available so that you can ascertain your buying power and know what you can afford. The lender will evaluate three aspects that impact your buying power:
- Debt-to-Income Ratio: A strong income doesn’t mean much to a lender if you are already leveraged with a lot of debt. Lenders want to be able to see that you can meet the mortgage payments. So, they will look at the amount that you already owe and compare it to your income. If you want to increase the size of your mortgage, then consider the benefits of paying off other credit cards and loans.
- Down Payment: The amount that you put down on the purchase will influence your overall buying power. If you have a big down payment, then you can get a nicer home without increasing the size of your mortgage. Additionally, the down payment shows that you are committed to the purchase, helping lenders to take you seriously.
- Credit Score: Every lender looks at your credit score, which is an indicator of your credit history, amounts owed, payment consistency, and the age of your credit lines. Having a high credit score helps you get better financing terms for your loan. For example, you can get a higher approval amount and a lower interest rate compared to someone with a low credit score.
Maximizing Your Home Purchase
Different strategies can be used to help you buy the home of your dreams. For example, a real estate agent can help you compare neighborhoods and evaluate cheaper options that fit in your price range. Or, you might look at opportunities to buy a fixer-upper, then renovate the home to create the perfect living space for your family.
Your buying power will influence the amount of financing that you can receive. But, there are a few strategies that can be used to boost your buying power or improve your lifestyle with a smaller budget.
The best thing that you can do is talk to an experienced real estate team for help. At DUFFY Realty, we are working hard to provide the best real estate services in the Atlanta industry. Talk to us for help with your upcoming home purchase. We want to help you find the home of your dreams! (678) 318-1700