How Much House Can I Afford? - Buyer Loan Qualification Explained

How much house can I afford? This is a question I talk with buyers about on almost a daily basis. Whether you have bought and sold many houses, or if this is your first time, in this video I walk your through the process and highlight a few rules of thumb and tips on what to do and not to do when financially preparing yourself for a real estate purchase.

4 Rules of Thumb for buyer qualification covered in this video:
1. 43%-50% of adjusted gross income will be used for your qualification by most lenders.
2. Check your credit - 640+ average score is typically the bottom score you will need.
3. Solid tax record proving stated adjusted gross income from step 1. Be prepared to share your tax records for the past 1-3 years with your lender.
4. Every $100,000 in mortgage costs about $550 per month (with today's interest rates and with Santa Cruz county average property tax rate of about 1.2% annually based on purchase price)

Extra tips:
- Its not worth lying to your lender or hiding things from them, the underwriter WILL find out - they are financial forensic investigators.
- Don't go finance a large purchase (like a sweet new sports car) while preparing for buying a house or during an escrow. Even if you can afford both because you're a baller, communicate clearly with your lender if you are making that purchase while considering a financed real estate purchase as well.


I am your host #PistolPeteRealEstate​​​​​​ and I’ll be providing regular additions to my TIP videos playlist so you are informed on how real estate works in Santa Cruz County and the surrounding regions. Other playlists on my channel revolve around community interviews and home tours showcasing the vivid diversity of housing in our region from cabins in the redwoods to beach houses with a view. Our county has alot of interesting nooks and corners to explore and ill be showcasing the lifestyle and community you can find here.

Shout out to my talented videographer:
Diana Dominguez - Instagram: @dianadovifilms

Shout out to Room Real Estate for helping with the production of this video find us here:
Instagram: @roomrealestate
Facebook: https://www.facebook.com/ROOMRealEsta...​
Website: https://www.roomsantacruz.com/​​​​

Final Thoughts: Timing the market is tough if not close to impossible to perfect and the financial environment for using a mortgage to buy a home is changing all the time based on how the lending market responds to macro economic forces. I recommend that if you are in a good financial position and have the savings for a down payment to make the move to consider buying real estate now because the loss in time with equity savings is likely worse than trying to time the market perfectly. Not only is it a sound long term investment but if you buy a home you also have a place to live that you have control over. You can build long term wealth and stability for you and your family through owning real estate. Let's get you started!

Peter “Pistol Pete” Eubank
Madani Team and Room RE
831-471-7330
[email protected]
Dre: 02015065
Instagram: @pistolpeteeubank
YouTube: Pistol Pete Eubank

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##PistolPeteRealEstate ##RoomSantaCruz ##SantaCruz ##RealEstate ##Qualification ##HomeBuying #Buyingahouse ##preapproval #Mortgage #Mortgageapproval #AdjustedGrossIncome #DebtToIncomeRatio #Debt_to_income_ratio #Adjusted_gross_income #Mortgage_approval #Pre-qualification #Buying_a_house #Real_Estate_Investing #Santa_Cruz_County

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