Boston, MA – Does your mortgage fit your wallet?

If you are a first-time home buyer in Boston, MA you must consider how much loan you can afford before you go shopping for that dream house. Excess debt can affect your ability to own a home or to keep a home so it's important to know what your financial “wallet” looks like. Before you go shopping for a mortgage make sure to calculate how much home you can afford.

Debt-to-Income Ratio. A good place to start is with your debt-to-income ratio. Lenders will use this ratio to see how much you qualify for. You can do a quick calculation yourself by dividing the total of your fixed expenses - such as rent, car loans, and credit cards – by your gross monthly income. This isn't a full picture but is a good starting point. Depending on if your loan is qualified or not your debt-to-income ratio will have a cap of 43%, meaning your mortgage payment can't exceed 43% of your monthly income. If you have a high level of debt you may need to reduce it before you can qualify for the mortgage you want.

What can you afford? Even if you qualify for a high-dollar mortgage you likely should not borrow the full amount. When you add in closing costs with the down payment much of your savings can be depleted. Consider taking on a smaller mortgage, therefore a smaller down payment, so you can keep some money in the bank for emergencies. A Boston, MA home affordability calculator can help you see what your mortgage and monthly expenses may look like.

Test out your mortgage in your wallet. Before taking out a mortgage and officially adding it to your wallet give it a test. Pretend to make a monthly mortgage payment by setting aside the additional amount you would pay each month. Live this way for a few months and see if it leaves you comfortable with your new spending. If the additional payment leaves you stressed or unable to live within your means than you should scale back that Boston, MA dream home.

When you are ready to purchase a home in Boston, MA look to an experienced Boston Real Estate Agent. I'm committed to providing you with the highest quality buyer service. When making the type of investment that buying a home requires, you deserve to have all the latest market information and the very best advice, both of which I can provide you with. I am always here should you have a question on a Boston, MA neighborhood such as South End, Fenway, Beacon Hill, or any other. I hope to speak with you soon!

Lucas Garofalo

Keller Williams Realty

(617) 861-3631

Lucas@LucasBostonHomes.com

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