Are you a home buyer?  How do you know how much house you can afford to buy?  The most obvious answer to this question is you need to talk to a lender. Your credit score and credit history coupled with your income and the types of debts that you carry will dictate how much the lender is willing to lend you. Once you know how much mortgage the lender has approved you for, you can then start your house hunt with confidence and enthusiasm.

If you are a new house hunter you should know that lenders will approve you based on your credit worthiness, so the better your credit history and score are, the better chance you have of qualifying for the best loan program that your lender has to offer. You should also know that you may qualify for more than you are willing to spend. What do I mean by this? Well, if you’re like most of my clients, the number that they lender has quoted them is higher than their comfort zone. If this happens to you ask the lender to provide you with a revised purchase price amount based on the monthly number you are comfortable with. AKA: have the lender back you into the mortgage by telling him how much you want to spend monthly – all in (mortgage payment, taxes, insurance, HOA fees). Once your lender knows what your target monthly payment is he can then provide you with a purchase price amount that will equal your preferred monthly budget.

But what if your credit history and score are less than stellar? What is your next step? I would recommend a qualified credit clean up program that can review your history and provide high quality advice as to how you can remove any blemishes on your report and put you on the road to increasing your score. Email me for a licensed qualified credit clean up company.

Be prepared when you call. You should expect your lender to ask you for your last two years of tax returns, recent paystub or w-2 forms and bank statements. Once you have scanned and emailed this information to them it could take a week or two for them to get back to you with an answer. Make sure they know that you are actively looking at homes and that a timely answer is what you are looking for.

Remember it’s best not to guess how much you can afford. The sooner you get this task completed the better off you will be. If you are in the Los Angeles real estate market, your offer to purchase a home must be accompanied by a lenders approval letter along with proof of funds for your down payment. So, until you have that approval letter in hand it is almost pointless to start searching. I hope this information was helpful!

Feel free to connect with me with questions at Happy house hunting!