Use this firsttuesday FARM Letter in your marketing. To request a FARM letter topic, or to see a list of all our FARM letter templates, visit our FARM Letter page.
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Determine your buyer purchasing power
Are you thinking about buying? Figure out how much home you are qualified to buy by determining your buyer purchasing power.
Buyer purchasing power measures your ability to purchase a home funded by a mortgage based on:
- your total household income; and
- the mortgage interest rate.
The interest rate is the recurring long-term cost you pay on the mortgage amount you borrow. Over time, your income rises but the mortgage payment remains the same. This expands your ability to borrow a greater amount of mortgage funds to either:
- buy a more expensive house; or
- refinance to lower your monthly payment.
Importantly, you need to consider mortgage terms, such as:
- one-time upfront costs that vary significantly among mortgage lenders;
- the length of the mortgage, ranging from 15-year to 30-year payoffs;
- a fixed (FRM) or adjustable (ARM) type of interest rate;
- obtaining your credit reports and credit scores; and
- evaluating which mortgage providers offer the most competitive cost quotes.
Have questions about choosing the right mortgage for you? Please contact me for more information. Knowledge of mortgage financing is my expertise.
