Calculate Home Buying: Power

A bank's pre-approval letter is the only way to "lock in" your official buying power before shopping.

Example: ($8,333 x 0.36) - $400 car payment = Step 3: Factor in "Hidden" Costs

Example: $2,600 - $650 = Step 4: Use a Mortgage Table calculate home buying power

Your total monthly debt payments (mortgage + car loans + student loans + credit cards) should not exceed 36% of your gross monthly income. 2. Down Payment Amount 3.5%: Minimum for FHA loans.

Multiply gross income by 0.36 (36%) and subtract existing monthly debts. A bank's pre-approval letter is the only way

Check what a $1,950 principal/interest payment buys at current rates. At a 6.5% interest rate, $1,950 supports a loan of approximately . Step 5: Add Your Down Payment Add your saved cash to the loan amount.

Buying power is the maximum amount you can spend on a home based on your financial profile. It combines your available for a down payment with the maximum loan a lender will grant you. 🏗️ The 3 Pillars of Buying Power 1. The 28/36 Rule Lenders typically follow these debt-to-income (DTI) ratios: Down Payment Amount 3

Secure lower interest rates, increasing your buying power.