In today’s times searching for and purchasing a new home is very time consuming, nerve racking and yet exciting. The entire process can take more than a year and is often one of the biggest events in a person’s life. For many of us buying a new home is both the beginning of a new life and a major accomplishment. For all of us it is important that we can comfortably afford our new home. There has to be a process for you to determine how much you can afford, as well as for lenders to determine how much you can afford, when purchasing your dream home.
What you can afford typically depends on your credit score, income, interest rate, down payment and current monthly bills; together these variables can help determine your interest rate. Firstly, the moneylenders use your credit scores to determine the amount of risk they are incurring to lend you money for a new Arizona condominiums home. If you have a high credit score you are likely a person that values your credit and paying your bills on time. The creditors will be taking less risk by lending you money and will lend you money at a comparatively lower rate of interest. Your income is another indication of how much you can afford. Lenders use your income minus your monthly bills to determine your DTI or debt to income ratio. A debt to income ratio less than 40% is attractive.