Sioux Falls, South Dakota Buy Right Guide - Lesson 6

How Much Home Can You Afford?

Once you have your minimum needs and your desired features of your home in mind and jotted down, the next step is to determine how much you can comfortably afford.

This is determined by your debt-to-income-ratio, which is the percentage of your gross monthly income divided by your fixed liabilities (monthly living expenses, car payments, alimony, credit cards, loans, and other installments). Don’t forget to give yourself some cushion for entertainment and other unexpected expenses.

There are two quick ways to get a good ballpark figure on how much you can afford according to FHA Guidelines.

1. Mortgage payment to income ratio must not be more than 29%

This is the maximum amount your monthly mortgage can be to qualify under FHA rules.

2. All fixed debt to income ratio must not be more than 41%

This is only a guide. Other factors such as your credit history, your spouse’s credit history, and how long you’ve been at your current job may effect the lender’s decision in granting or denying a loan request.

Tomorrow Lesson 7 - Sioux Falls Buy Right Guide

Tomorrow you'll receive Lesson #7 of the Sioux Falls Buy Right Guide. In it you'll find out why all Sioux Falls Real Estate Agents are not the same.

Enlist a Team of Sioux Falls Real Estate Professionals

If you'd like further assistance, please don't hesitate to call us or submit a contact request. We'd be honored to have the opportunity to serve you and be the Sioux Falls Real Estate Expert on your team.

We'd be glad to also help you find a very reputable Mortgage Broker who specializes in home loans in Sioux Falls and the surrounding areas. We'll help you find a Mortgage Broker to fulfill all of your specific needs.