Chicago Financial Services

How Much can I Afford in a Home Loan

So you need a home loan but want to know how much you can afford.

Typically an underwriter would approve your home loan request if your new housing payment did not exceed 32% – 35% of your gross monthly income, and your total debts (including car loans, minimum credit card payments, etc.) did not exceed 42% – 45% of your gross monthly income.

If you don’t feel like doing the math, just contact one of our home loan experts and let them give you an answer.

How much of a home loan do you want?

It’s also a personal financial decision.  A first time home owner may purchase more than she can afford and be “house poor” for awhile because she knows she will be making more money in the future.  Sure, that is a danger, so if you buy “too little” house it may be not the best investment, too small for a growing family, and cause you to miss out on a better opportunity.  Yes, we can’t totally predict the future, so that is why it’s a personal decision.

Talk to a mortgage professional at CFS Mortgage to help guide through the process and give you their expert advice.