REAL TipS: BUYING

What can I afford?

The amount a lender approves for your mortgage and what you can afford are not necessarily the same. Sure, it doesn’t hurt to find out the maximum someone will lend you to purchase a home. In fact, it can be pretty exciting if that number is higher than you had anticipated. But don’t start looking at homes in that price range until you determine if the loan and the associated payments truly fit your budget.

Lenders ask for a lot of information about you—details about your job, your salary, outstanding loans and other debts, previous residences, etc. But they don’t typically delve into your future plans. If you have college tuition bills looming for a child or two (or three), your financial situation may be about to significantly change. Ditto if you may have to contribute financially to help out elderly parents. A career change or job instability, plans to have children, and other big life changes also can make a difference in your housing budget.

On the flip side, you may be at the beginning of a career that promises a much higher salary in the coming years. Or perhaps you have an inheritance or other large sum of money heading your way in the near future.

Whatever your situation, make sure you consider the details about your life that only you and family know when deciding how much home you can truly afford.

Texas Association of Realtors®