Manufactured Housing News

Buying a home is one of the biggest financial decisions you will ever make, and determining how much mortgage you can afford is an important first step. Triad’s guide will walk you through some key factors to consider, so you can make an informed decision that sets you up for long-term stability.

Understand Your Budget

Before diving into the housing market, take a close look at your personal finances. Here are the main things to review:

Income: Calculate your total monthly income, including salaries, bonuses, and any other sources of revenue.
Expenses: Look at your recurring monthly expenses, like utilities, groceries, insurance, and other spending. Don’t forget to factor in any debt payments, like student loans or car loans.
Savings: Consider the savings you’ll need for a down payment, closing costs, and an emergency fund.

By understanding your budget, you can figure out how much you’re comfortable putting towards a monthly mortgage payment.

The 28/36 Rule

A commonly used guideline in the mortgage industry is the 28/36 rule. This rule suggests that:

• 28% of your gross monthly income should be the maximum you spend on housing-related costs, including your mortgage payment, property taxes, and insurance.
• 36% of your gross monthly income should be the maximum you spend on total debt, including housing costs, credit cards, and other loans.

For example, if your gross monthly income is $6,000, your housing costs should not go over $1,680 (28%), and your total debt payments should stay below $2,160 (36%).

Down Payment & Loan Options

Your down payment size majorly affects how much house you can afford. A larger down payment reduces the loan amount and might help you qualify for better interest rates. Some suggest aiming for a 20% down payment to avoid private mortgage insurance (PMI), but many lenders offer loans with lower down payment requirements, such as:

FHA Loans: Require as little as 3.5% down, but include mortgage insurance premiums.

VA Loans: Available to eligible veterans and active-duty military members with no down payment required.

Conventional Loans: Some lenders offer options with down payments as low as 3%, though PMI may apply.

Other Costs to Consider

A mortgage payment is only one piece of the puzzle. Be prepared for these additional costs:

1. Property Taxes: Rates vary by location and can add a significant amount to your monthly housing costs.
2. Homeowners Insurance: Protects your investment and is typically required by lenders. Learn more about our homeowners insurance options for mobile and manufactured homes.
3. HOA Fees: If you’re buying in a community with a homeowners’ association, plan for monthly or annual fees.
4. Maintenance and Repairs: Experts recommend setting aside 1% to 3% of your home’s purchase price annually for upkeep.

Get Pre-Approved

A mortgage pre-approval gives you a clear picture of how much a lender is willing to let you borrow. It also shows sellers that you’re a serious buyer. During the pre-approval process, lenders will look at your:

Credit Score: A higher score translates to better loan terms.

Debt-to-Income Ratio (DTI): Ensures you have enough income to manage monthly payments.

Employment History: Lenders prefer stable and consistent income.

Use Online Calculators

Mortgage calculators are a helpful tool to estimate how much house you can afford. Input details such as your income, down payment, loan term, and interest rate to get an idea of your price range.

Determining how much mortgage you can afford requires careful planning and consideration of your financial situation. By following guidelines like the 28/36 rule, understanding associated costs, and getting pre-approved, you’ll be ready to make a confident home-buying decision. Remember, the goal is not just to buy a house, but to do so in a way that ensures long-term financial peace of mind.