How Much Home Can I Afford ??
Pre-Qualification vs. Pre-Approval
Before you go out looking for a home, it is a good idea to talk with a couple of lending institutions to get pre-qualified or pre-approved for a loan to find out how much mortgage you can handle. Pre-qualification is just a guesstimate of how much home you can afford. But with pre-approval, it is just that: getting your mortgage approved prior to going out and looking for a new home.
Down Payment
Another thing to consider is your down payment amount. Think you can't buy a home without a 10% or 20% down payment, think again. Thanks to more lenient government guidelines and new mortgage products, many people can now get into a house for as little as 3% down or less. There are even some special programs for first-time buyers that help with closing costs and sometimes even the payments. Check with your loan officer to find out what may be available to you.