What kind of home loan can i afford

Sure, lenders may be more than happy to put your name on a big loan, but how do you feel about it? Are you comfortable with how it may impact your monthly budget, or are you feeling a bit stretched? Consider how your new home costs may impact your other spending goals, such as travel and savings.

How much of a down payment should I make? Are you putting down as little as possible and having to make up for it with larger monthly payments — and possibly having to pay mortgage insurance?

In some respects, the mortgage lending industry is working against your best interest. If you are deemed a qualified borrower, a lender is prone to approve you for the maximum it believes you can afford. But in some cases, that amount may be too generous. Buying a home always means dealing with big numbers. And the impact to your budget may seem to be a stretch, particularly in the beginning.

The challenge is buying a home that meets your current and future needs, without feeling like all of your money is in your home — leaving you without the financial freedom to travel, save for other priorities and have a cash flow cushion.

Run affordability scenarios. You can get another view of your home-buying budget by running some what-ifs through the NerdWallet home affordability calculator. Talk to more than one lender. You are more likely to get a better interest rate by comparing terms offered by multiple lenders, and it might be illuminating to see the loan amounts different lenders will qualify you for.

Consider all homeownership expenses. Lenders consider several factors in determining the amount you qualify for, including:. Your debt-to-income ratio. Your loan-to-value ratio. This ratio is a function of the amount of money you put down. Your credit score. Small improvements in one or more can make a substantial difference:.

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Estimate how much home you can afford with our affordability calculator. Simply enter your monthly income, expenses and expected interest rate to get your estimate. Adjust the loan terms to see your estimated home price, loan amount, down payment and monthly payment change as well.

Once you find the price you can afford, contact a Home Lending Advisor or visit your local branch to get started. Now that you have your home estimate, browse our collection of helpful articles and blog posts, use our tools to determine your mortgage payments, review current rates and see how to start your home buying journey.

Check out our helpful how-to articles and informative blog posts, as well as things to consider before buying a home. Read our content. Look up important mortgage terms in our comprehensive dictionary, and use our calculators to help set your budget.

Explore our tools. See our FAQs for answers to common questions on buying, refinancing and owning a home. Check out our FAQs. Learn more about mortgages, access helpful tools and get tips on becoming a homeowner. Knowing how much how you can afford is a great starting point in your home buying process. We created our affordability calculator to help you understand your budget from the moment you start looking for a home. Simply enter your monthly income, expenses and specified mortgage rate.

Choose between loan terms of , , and year mortgages and see your estimated home price, loan amount, down payment and monthly mortgage payments change. Our mortgage calculato r and home value estimator can help you be a confident homeowner.

With our mortgage calculator, you can see an estimate of your total mortgage payment, including principal, interest, taxes, and insurance. And our home value estimator shows you how much the homes you're looking at may be worth.