How Much House
Can I Afford In Minnesota?

Once you've chosen to investigate the potential of buying a Minnesota home, it becomes a matter of finding out what exactly you can afford.

Before even visiting a lender to qualify for a mortgage, there are usually two big questions one wants answered:

1: How much money do I have to have saved up for a down payment?
2: How much money will my monthly payment be?

However much I would love to answer those questions for you, there is no black and white answer.

You must first find out with the help of the lender, what you qualify for, then choose for yourself the answers to those questions. You may qualify for loans that require no money down. However, putting 5% or 10% down may be advantageous. Then in turn, these factors will greatly affect what your monthly payment will be.

For example, if you know exactly what you'd like your monthly payment to be, and you have some money in savings, you can look at the types of loans you qualify for and see how much down payment is needed to get to that target monthly payment. You may also need to adjust your target purchase price to bring your monthly payment into your acceptable range. This may mean you qualify for a much bigger house than you actually purchase.

Say for example, you qualify for a million-dollar house but, to keep your monthly payment in line, you choose a $300,000 house. A dozen years ago or more, it was more common to go to a Realtor first.

Now most people start with the lender to find out what they qualify for, then get a great Realtor to help them see the houses in their range. You can even start on line with automated prequalification forums. But be aware when you give out your social security number on those forms someone will pull a credit check and someone will call to solicit your business.

Ideally, get recommendations from friends or family members of lenders that they've used and like. If no one has a lender they are loyal to, ask your MN Realtor, he or she will know the reputable people in town.