The homebuying process is thrilling and at times, sure to keep you on the edge of your seat. The housing market is
constantly changing and knowing where you stand financially is crucial when you wish to purchase a property. 

So, how do you evaluate your standing to figure out how much you can afford on your next home purchase? 

Determine your household income 

Start by examining the finances of your household. If you intend to acquire a home loan, loan agencies often examine
how much income your household makes on a yearly basis. They also inquire about the amount of debt you may
have. 

For this reason, it’s good to have what you’d consider to be an agreeable amount of money coming into the household
as well as savings. Providing information which confirms you can afford the loan comfortably, increases your chances
of getting the financing you desire. 

A quick way to get a rough estimate of your gross monthly income is to take the yearly salary you make, and divide
the amount by 12. This number is a good starting point when figuring out what you can afford. 

Factors to consider when calculating how much you can afford 

In addition to the monthly income you make, here are some essential points to consider when determining how much home
you can afford: 

• Savings: The amount of money you already have for expenses such as home repairs and down
  payment costs. 
• Additional expenses: In addition to paying off your home, utilities and yearly tax expenses
  need to be accounted for.
• Credit score: Home loan companies and banks often consider your credit score when determining
  if you qualify for their loan. A good credit score usually indicates you responsibly pay off debts on time and
  have a good debt-to-income ratio. 

Calculating your income and expenses may seem intimidating however, consider speaking with your loan provider for
resources which can help you make these calculations a bit easier. Many banks offer loan and expense calculators
requiring a few clicks of a button.