So, you're starting your new home journey and you're not sure where to begin? An important first step is understanding your buying power, also known as purchasing power. Buying power tells you how much you can afford. Keep reading to learn more!
Buying power indicates how much you can borrow from a mortgage lender to purchase a home, without exceeding your ability to repay the loan. There are a lot of key factors that can affect your buying power, but the one to start with is calculating your Debt-to-Income Ratio (DTI). Your DTI is the ratio of your monthly debt payments (including the new mortgage) to your gross monthly income. A lower DTI increases your buying power and what you can afford when looking for a new home. Let's check out an example of calculating your DTI!
For Example:
You'll want to take your monthly debts divided by gross monthly income - and that is your Debt-to-Income! In this example, your DTI would be 51%. This percentage helps your Loan Officer determine how much you can afford, and what loan type you would qualify for.
Make it easy on yourself and head on over to our trusted lender, Victory Mortgage, and they can help you get started! Our Loan Officers are experts in New Home Construction lending and can guide you through the process. Get started today!
Interested in learning more? Hear from Loan Officer Megan about calculating your DTI!
Victory Mortgage NMLS 461249, Equal Housing Lender
Stay tuned for more lifestyle content from Fischer Homes. Remember that throughout our journey as your builder, we want to ensure that your experience doesn’t end when you move into your new home. Fischer Homes builds in Atlanta, Cincinnati, Columbus, Dayton, Indianapolis, Louisville, Northwest Florida, Northern Kentucky, and St. Louis. Fischer Homes is forever focused on continuing to go Beyond the Build, by continuing to build the best customer experience possible.