Physician’s Guide: Determining Affordability in Home Buying
As a physician, your work is all about precise diagnosis and accurate treatment plans. When it comes to buying a home, a similar level of precision can help you make a wise investment. Understanding what you can afford is the first step in the home buying journey. This blog post will guide physicians on how to determine home affordability.
Understanding Home Affordability
Home affordability isn’t just about whether you can make the mortgage payments. It also includes being able to continue living the lifestyle you want, saving for the future, and having a cushion for unexpected expenses.
Here are some key factors to consider when determining what you can afford:
Understand Your Income
A general rule of thumb is that your monthly housing costs should not exceed 28% of your gross monthly income. As a physician, you likely have a significant income, but you may also have large student loans or other debts. Take all of this into account.
Review Your Debts
The total of your monthly debt payments – including student loans, credit card payments, car loans, and your future home mortgage – should not exceed 36% of your gross income. This is known as your debt-to-income (DTI) ratio.
The amount of down payment you can afford significantly affects the price of the home you can buy. Although there are options for low down payment mortgages, a down payment of 20% or more will help you avoid private mortgage insurance (PMI).
Savings and Emergency Fund
Don’t forget to factor in the need for savings and an emergency fund. Experts recommend having at least three to six months’ worth of living expenses in an emergency fund.
Other Homeownership Costs
Homeownership involves more than just a mortgage payment. Don’t forget about property taxes, homeowners insurance, and maintenance costs.
Using online home affordability calculators can be a good starting point. However, every situation is unique, and physicians face their own set of financial challenges and benefits.
At Curbside, we’re dedicated to helping physicians navigate the home buying journey. We understand your unique needs and are here to provide guidance to ensure you make the best decision for your situation. The Consumer Financial Protection Bureau provides additional resources to help prospective home buyers understand affordability.
Ready to make the move? Contact Curbside today and let us guide you on the journey to homeownership. We’re here to help physicians like you find a home that fits your budget and lifestyle. Don’t have time for a call? Provide us a few details in this form and we will match you with the right partners for your home purchase.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Consult with a financial advisor or specialist before making any major financial decisions, including those related to home loans, refinancing, or purchasing real estate.