You want to be able to build a home with confidence and know what you can comfortably afford before you buy. The trouble many buyers face is they qualify for more money to borrow than what they should actually spend, based on their monthly expenses. There are ways to save frustration while deciding on a floor plan, so you don’t choose something where the mortgage payment could stretch you too far. Here are some points to consider:

How much can I qualify for?

The more appropriate question to ask is, “How much house can I afford?” It is best to start backward to determine what your budget can support. A person can qualify with their total debt being 55% of their gross income. Meaning, if you make $4000 a month, $2200 of that could be going to other debts, such as car payments, credit cards, or anything else. So you may qualify for a certain amount of money, but you must determine what amount will work into your budget with other expenses you already have.

What does your monthly budget support?

The better approach is to calculate your monthly budget first, including current debts or other monthly expenses, then you will be able to see how much of a mortgage payment you can realistically afford within that budget. For example, if you currently pay $1100 in rent, but feel you could do a new house payment of $1400, have a loan officer help break down that total payment to help determine the cost of floor plans to look for. There are certain items to consider that make up a total payment, including: property taxes, mortgage insurance, and home owners insurance in addition to principal and interest.

Talk to a Mortgage Professional

You should talk to a mortgage professional to get pre-qualified, discuss your options and your individual situation. They will help you determine how much house you can afford based on that monthly payment and what your potential loan amount could be. Doing these up front will make the design process fun, you will be able to select a floor plan that fits your price budget and any awesome upgrades you want in your new EDGE Home.