How Much Mortgage is Right for You?

Posted by Dan Wolf on Friday, April 26th, 2013 at 8:07am.

You're staring at your dream home and your heart is saying, "Yes!" Before you let your heart swoon over that house, though, take a deep breath. Then ask yourself a simple question: "How much mortgage can I qualify for — and is that what I can realistically afford?"

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These days, the odds of finding an affordable mortgage are promising thanks to historically low interest rates. As of mid-April, the average U.S. rate on a 30-year fixed-rate mortgage was at 3.43 percent, according to the Alaska Journal of Commerce.

But what does that mean for you? Our online calculator will help you run some numbers. Other calculators, like this one on Yahoo Finance, take into consideration a variety of your other financial obligations to give you a detailed picture. Facing up to any potential gap between your wallet and your wishes will help keep your dream from turning into a nightmare.

When lenders look at your ability to repay a loan they take into account all your income and expenses. Generally speaking, keeping your housing cost to about 28 percent of your income (and your total debt payments to about 36 percent) is a good idea.

A little advance education also goes a long way to helping you put your potential purchase into perspective. The U.S. Department of Housing & Urban Development offers a portal to lots of information about housing for Alaskans here, as well as a page full of homeownership assistance resources. And the Federal Trade Commission provides numerous consumer tips for prospective homebuyers about home loans.

After some thoughtful research and preliminary figuring on your part, sitting down with a real, live expert — like one of our expert Realtors here at Wolf Real Estate Professionals — will help you think realistically about a possible mortgage so you can safely make your dream a reality. Contact us.

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