Buying a home is one of the biggest financial decisions you'll make. That's why the first question many new homebuyers ask is How do I determine my price range? There are a number of factors that lead to that answer.
And a home mortgage consultant can help you. Since every buyer is different, a home mortgage consultant will want to get to know you so they can help you look at your whole financial picture before you start shopping for a home.
First, they'll talk with you about all the sources of income you'll use to pay your monthly bills. These sources can be from primary, secondary and part time jobs, along with overtime, bonuses and commissions. Other sources of income could be retirement or veterans benefits, disability payments and rental or investment income.
Alimony, child support or separate maintenance income can also be used but are not required. Next, they'll help you review your current debts and living expenses, such as credit card bills, student loans, car payments and rent. They will also review your credit history. Since your credit score can also affect your mortgage rate, it's a good idea to check your credit history before applying for a loan so you can correct any issues. You can get a free credit report annually at WWW.AnnualCreditReport.com and eligible Wells Fargo customers can access their credit scores and credit reports through their Wells Fargo banking account.
If you do have something on your credit report that hasn't been resolved, don't be discouraged. Not everyone has a perfect credit score and your home mortgage consultant will work with you on mortgage options that may be available. Finally, your HMC can talk with you about the down payment amount you want to make, the loan amount you want to apply for, and monthly payments that are comfortable for you. They can run cost scenarios with you to see how your down payment amount and credit score may affect your monthly mortgage payment, or how payments differ between different types of mortgage loans that are available to you.
If you want to see these options on your own, you can go to the Wells Fargo website and use the home affordability calculator to help you find your potential home price range. After entering in your yearly income, your existing debt, down payment amount and your location where you are looking to buy, you will see a home affordability estimate that shows your estimated home price, monthly payment and down payment amount. Here you can see that a home price of $250,000 with a 20% down payment of $50,000 would bring a monthly payment of $1,098.
You can also see how the home price may change when you change the amount of the monthly payment. Here we decreased the monthly payment amount to $500 and see that the home price goes down to $134,302, while the down payment amount remains the same.
Note that every situation is different and these results are only for illustrative purposes. You can also find your estimated interest rate and see estimated monthly payments for any home loan amount online with the Wells Fargo Mortgage Rate Calculator.
Once you enter your location, purchase price, down payment and credit score, you can get an estimated interest rate. You can also see how your payments may change with different down payment amounts or loan term options. Watch what happens if we change the loan term to 15 years from 30.
You will see in this example how the monthly payment increases, but the interest rate drops and the length of the loan is 15 years shorter. Your actual rate payment and costs could be different than what you see online.
The data is based on certain assumptions like the property type and owner occupancy, as well as the information you enter. So it's a good idea to connect with your home mortgage consultant to discuss loan options that are best for you. And with the information you have gathered, you can ask for a mortgage preapproval letter. Then when you are ready to shop, you'll already have a letter that shows sellers that you are likely a serious buyer. Your Wells Fargo Home Mortgage consultant can help you understand the options that you have so you can confidently make choices that are right for you.
We're here for you throughout the entire process, so reach out to us at any time. We're here to help.
Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
© 2022 Wells Fargo Bank, N.A. NMLSR ID 399801. Equal Housing Lender.
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