If you're thinking about buying a home in the San Gabriel Valley, one of the first questions you may have is:
How much house can I actually afford?
The answer isn't necessarily the highest purchase price a lender is willing to approve. Your comfortable budget should take into account your monthly payment, other debts, savings, lifestyle, and the ongoing costs of owning a home.
The Consumer Financial Protection Bureau (CFPB) specifically recommends focusing on what fits comfortably within your budget rather than simply how much you qualify to borrow. Consumer Financial Protection Bureau
1. Start With the Monthly Payment, Not Just the Home Price
It's easy to look at a home's asking price and immediately decide whether it's within your budget. But two homes with the same price can have different monthly costs.
Your total housing expense may include:
Mortgage principal and interest
Property taxes
Homeowners insurance
Mortgage insurance, when applicable
HOA dues, if applicable
Maintenance and other homeownership expenses
The CFPB and Freddie Mac both recommend considering these additional costs when determining an affordable housing budget. Consumer Financial Protection Bureau
That's why I encourage buyers to ask:
“What monthly payment am I comfortable with?”
—not only—
“What purchase price can I qualify for?”