Buying Your Home

Know What You Can Afford

One of the most frustrating phases of the home-buying process is finding the home you really want on the budget you can afford. Some buyers waste time and energy house-hunting before they know what they can actually afford. So, one of the very first steps you should take when thinking of purchasing a home is to assess your finances.

Compare Buying versus Renting

Find out about current interest rates

Understand what your closing costs will be

Calculate your income, debt ratio and down payment

Now, figure how much you can afford to pay for your dream home

Most lending institutions will be more than happy to help you in determining what your home-buying budget will be, taking all the confusion out of the various financing options. Which is better: finding the perfect home only to find out later you can't afford it, or knowing upfront what you can afford so that once you find the perfect house, you know you can buy it?

The amount for which you qualify is based on two different calculations. Using what are known as qualification ratios, lenders evaluate your income and long-term debts to determine a "safe" amount for your mortgage payments. A fairly standard ratio is 28/33. Some mortgage plans use more liberal ratios - for example, FHA currently uses 29/41.

It works like this: With a 28/33 ratio, you are allowed to spend up to 28% of your gross monthly income for a mortgage payment. The lender will then run a different calculation. This one is your loan payment and debt payments combined, which cannot exceed 33% of your gross monthly income. To calculate how much you may borrow, you also need an estimate of current interest rates.

As part of the calculation, you may need to estimate and include the property taxes, homeowner's insurance, and Homeowner Association fees (if applicable). These are considered part of your monthly expenses.

Begin your home buying process with us!
Any of our sales associates or any mortgage lender will be happy to analyze it for you.

Have A Question?

We are here to walk along side you through the entire buying process.

Send us a message and we will be glad to help find your perfect dream home!

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Frequently Asked Questions

Here are some of the common questions we hear from our customers.

BUYING RELATED QUESTIONS

How do I know if I’m ready to buy a home?

If you have stable finances, a clear idea of your needs, and are ready to settle in one location, you might be ready to buy. Brian can help you evaluate your readiness.

What is the first step in the home-buying process?

Getting pre-approved for a mortgage is a great place to start. It helps you understand your budget and shows sellers you're serious.

How much do I need for a down payment?

The amount varies, but many buyers put down 5%–20%. Some loan programs require even less. Brian can connect you with trusted lenders to explore your options.

What should I look for during a home tour?

Pay attention to layout, condition, and location. Consider future needs and potential red flags. Brian will help you identify key factors and ask the right questions.

Do I need a home inspection?

Absolutely. A home inspection helps uncover potential issues before you buy, giving you peace of mind or negotiation power.

SELLING RELATED QUESTIONS

How do I determine my home’s market value?

Brian offers a free comparative market analysis (CMA) to help you understand your home’s current value based on market trends and recent sales.

How long does it take to sell a home?

Timing varies depending on the market, pricing, and location. On average, homes in Paducah sell in 4 - 12 days. Brian and the team works to streamline the process and attract the right buyers quickly