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First Time Home Buyers: What Size Mortgage Is Right for You?

Perhaps the low mortgage rates for 30- and 15-year fixed mortgages have led you to contemplate whether or not now is the right time for you to buy your first home. The home you buy largely depends on your qualifications for a mortgage. There are several factors that determine the amount of money you can and should borrow from a lender, including the down payment you have set aside and your debt-to-income ratio.

If you’ve been keeping an eye on the housing market and steadily putting money aside for a down payment, the next step is to determine the size mortgage that is right for you. PFCU provides a helpful Mortgage Qualification Worksheet through BALANCE that can help you determine if you would qualify for the loan you would need to buy the home of your dreams.

To help you determine if you qualify for the mortgage, the Mortgage Qualification Worksheet asks for the following information: your monthly gross income, your allowable monthly housing cost, monthly taxes and insurance costs, your allowable monthly debt (38% is maximum debt level) and your other monthly debt payments. If your monthly housing cost is not more than your allowable monthly housing cost, and your total monthly cost is not more than your allowable monthly debt, you may qualify for the mortgage.

We encourage you to complete this worksheet before getting too far into the home-buying process. Knowing the mortgage you qualify for will help focus your search and ensure you are looking at homes that are within your budget. If you need help or have questions about determining the right monthly payment for you, please call our Mortgage Department at 215-934-3505 to talk with a PFCU Mortgage Professional.

 

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