“Hey David, I make more money now. What kind of house can I buy on my new salary?” – A Lot of First-time Home Buyers
“There’s an equation for that!” – David Sidoni, #1 First-time Home Buyer Advocate & Data Chart Enthusiast
Yes, it’s true. There is indeed an equation that can help you determine how much home you can afford based on how much you make. David will spill all the tea in this episode… but you HAVE to promise to listen to the whole podcast. He’s not kidding. There’s more to the numbers than meets the ears.
Here are some topics from today’s discussion:
- How the equation works
- How determining your monthly payments can help you buy a home
- All the warnings and cautions that come with this equation
[02:21] Let’s Look at the Numbers
Before we dive in, there’s one important caveat: every buyer has extenuating circumstances that will affect this number. This is a GUIDE.
First thing’s first. When it comes to getting approval for buying a home, it all comes down to the monthly numbers. While your salary might be measured by an annual sum, it’s all measured monthly in real estate. So, take a look at how much a monthly payment would cost for your home, how much you bring in each month (pre-taxes), and then do the math from there.
[19:23] Here’s the Catch
If you made it this far in the episode, great! You’ve kept your promise.
David made all of his calculations based on very rounded, very average numbers. Know that interest rates, home prices, and the overall market will ALWAYS change. Always. You can’t just walk away with the numbers from this equation and assume you’ve got it all together. Instead, take this equation, get a ballpark estimate, and then get in touch with a highly qualified real estate agent and allow them to help guide you the rest of the way.