Sayreville & Piscataway NJ Real Estate Blog

Owning a Mercer & Middlesex County NJ home can be a sign of independence and success.  It allows you to build up equity and the mortgage interest and property taxes are tax-deductible.  Can you afford it, though? 

 

Reputable lenders look at a list of criteria to decide how much they’ll loan you.  This list includes:

·                     Credit score

·                     Existing assets including cash

·                     Car leases or loans

·                     Credit card balances

·                    

Debt consolidation loans

·                     Home equity loans

·                     Installment loans

·                     Student loans

·                     Other monthly debts

·                     Size/source of your down payment

 

If you’d like to get an idea of what you can afford before talking to a lender, here are a few tools you can use to decide whether a Mercer & Middlesex County NJ home is within your budget:

 

• As a rule of thumb, your house hunting budget shouldn’t be more than 2.5 times your pre-tax annual income.  If you earn $50,000 a year, your budget for house hunting should be around $125,000.

 

• Your Housing Expense Ratio, which is principal, interest, taxes and insurance (PITI) shouldn’t be more than 25% to 28% of your pre-tax monthly income.

 

• You’re Debt-to-Income Ratio should be no more than 36% of your pre-tax monthly income.  This is the ratio between how much you owe and how much you earn.

 

• Use an online calculator to figure how much home you can afford.

 

“Qualifying for” and “can afford” are two different things.  Shopping for a Mercer & Middlesex County NJ home within your budget will save you a lot of heartache now and in the future.

 

If you’d like help determining how much mortgage you can really afford, I can help.  Call me at 732-247-1935 ext 182 or email me at freddie@freddiemoorer.com for more information.

 

 

LINKS:

 

Housing Expense Ratio: 

http://www.mortgageqna.com/mortgage-costs-fees/housing-expense-ratio.html

 

Debt-to-Income Ratio:

http://www.lendingtree.com/mortgage-loans/advice/qualifying-for-a-loan/calculating-debt-to-income/

 

figure how much home you can afford: (link to the calculator on your website or use this link)

http://www.lendingtree.com/smartborrower/loan-calculators/