Should I Stretch My Budget To Get Into A Home?

Call the Sarasota Suncoast Team at 941.894.4063 or visit our website at http://www.SarasotaSuncoastHomes.com 

Should I Stretch My Budget To Get Into A Home? That's a question that is likely going to come up during your house hunt. When you decide to purchase a home, you should write down a written budget to see where all of your hard earned money is going.

Deciding how much house you can afford

Your lender decides what you can borrow but you decide what you can afford.

Lenders are careful, but they make qualification decisions based on averages and formulas. They won’t understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected – for all the new opportunities your home will give you to spend money, from furnishings, to landscaping, to repairs.

Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn’t be more than 28 percent of the buyer’s gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn’t be more than 36 percent. (In Canada lenders apply similar formulas to determine how much a buyer can afford. The Gross Debt Service ratio, or GDS, is not to exceed 32 percent of the buyer’s gross monthly income, and the Total Debt Service ratio, or TDS, is not to exceed 40 percent of the buyer’s total debt load.) As home prices have risen, some lenders have responded by stretching these ratios to as high as 50 percent. No matter how expensive your market though, we urge you to think carefully before stretching your budget quite so much.

Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most. Now the question again is Should I Stretch My Budget To Get Into A Home?

Maybe you decide that today the best course of action is to stay within your budget rather than stretching it. Search the MLS here to see what your money can buy - you may be surprised!

Should I Stretch My Budget To Get Into A Home? This is a question only you can answer but a specialist at the Sarasota Suncoast Team is happy to help you answer this question during a confidential consultation. Call today at 941.894.4063 or visit our website at http://www.SarasotaSuncoastHomes.com