How much home can I afford?
How many times have I heard that question?
Let me be clear up front – I’m not a mortgage loan officer. There is enough to learn about the business of real estate that I don’t have enough left-over brain space for even beginning to learn the mortgage business. I’d rather leave that in the more-than-capable hands of the two mortgage loan officers with whom I’ve had the privilege to work over the past many years.
That said, here’s my simplified version of figuring out how much home you can afford. It all begins with determining your budget. If you can nail down your budget, you’ll be well along your way to owning a home.
1. Determine your annual income.
2. List your expenses (beginning with basic needs, followed by your “wants”,
and don’t forget savings).
3. Prioritize your expenses.
4. Stop when you use up all your income.
Your mortgage loan officer will work with your budget figures to help you understand how much home you can afford.
And now, a pet peeve of mine. If this process looks simple, it’s because it really is simple. So why can’t our illustrious elected officials in Lansing figure this out? We still don’t have a balanced budget for the State of Michigan.