Find out how much mortgage payment you can afford 

Minneapolis, MN: Whether you’re a first-time homebuyer or looking to upgrade to a larger home, understanding how much mortgage payment you can afford is crucial.

Here at Cambria Mortgage, we help you navigate through this process with some key steps:

Prepare An Honest Monthly Budget:

Start by creating a comprehensive monthly budget that accounts for all family income and expenses. Include not only regular monthly bills, like you car payment, but also those irregular yet significant costs like car repairs. Also factor your entertainment expenses, like dinner and a movie habits.

The more thorough your budget, the clearer your financial picture will become, aiding in determining your mortgage affordability.

What You Can Afford Versus How Much A Lenders Says They Will Lend

Under most home mortgage loan programs, mortgage lenders will let you get a mortgage loan all the way up to 50% of your income before taxes.  This 50% only calculates the new home and all your recurring debt that shows up on your credit report. It doesn’t include anything not on your credit report.  Daycare, internet, cell phone bills, etc., generally are NOT calculated.

While a lender may let you go that high, you are only setting yourself up for failure in the long run.  Try keeping the house payment under 30% of your monthly income, and all debt including the house under 42% of your income.

Your Down Payment Plays A Huge Role:

The size of your down payment directly influences the amount of financing you’ll need. Every dollar you put towards your down payment reduces the amount you’ll need to borrow, thereby lowering your interest payments over the life of the loan. Consider how much you can realistically contribute to your down payment and look for opportunities to increase it if possible.

Minimum down payments requirements can be as low as zero, and even as much as 20% of the homes price depending on many factors, but the most recent data I could find indicates that the average down payment on a house in 2024 was:

• First-time homebuyers typically put down about 8%.
• Repeat buyers, on average, put down around 19%.

What Interest Rate Will You End Up Paying?

Interest rates can significantly affect your total mortgage cost. The actual interest rate you pay will vary on many factors, including current market conditions, loan type, down payment size, and credit scores.  The only way to get an accurate quote, is to complete a full application, then have a discussion with a licensed Loan Officer to understand your wants, needs, and ability. While you can see rates online many places, many of those rates may not apply to your personal situation, or come loaded with a whole lot of additional costs you don’t want to pay.

At Cambria Mortgage, we understand this, and are always happy to review your situation for free to zero in on what rates are available to you.  Simply complete our Quick Quote form online.  There are no costs or obligation.

With accurate rate and program information, and utilizing tools like the payment calculator on our free smartphone app, you can get a better idea how different rates impact your monthly payments and overall loan cost.

Consult A Mortgage Professional To Learn More:

Analyzing your financial situation for mortgage readiness doesn’t need to be scary. The licensed mortgage professionals at Cambria Mortgage are here to guide you through this process. If you’re unsure about any aspect of financing your home purchase, reach out to us for personalized advice tailored to your financial situation.

With Cambria Mortgage, make informed decisions about your home buying journey, ensuring you’re not just buying a house, but building a home within your financial limits. Contact us today to learn more about how we can help you secure the mortgage that’s right for you.

Ready to take the first step toward your dream home? Let’s make it happen!

We lend in the states of CO, FL, IA, MN , ND, SD, WI, only.

To see if you qualify, we simply need you to complete a no cost, no obligation online application. 

You can call (651) 552-3681,  or click here to schedule an appointment for a phone, office, or Zoom appointment right online, or for faster service, simply complete an online application