Understanding ‘Disposable Income’ and How This Will Impact Your Mortgage Approval

There are few things more exciting than finding your ideal home, but with the rising cost of housing, a person’s dream home can often come with a very high purchase price. If you’re wondering how much home you can truly afford and how your cost of living will fare for your mortgage approval, here are some of the details on what you can expect when it comes to finding a home at an affordable price.

What Is Your Debt-to-Income Ratio?

Before deciding if a home is right for you, it’s important to calculate what your debt-to-income (DTI) ratio is to determine how much house you can afford. The debt amount will include any credit cards, existing mortgages and other loan payments that you pay down each month. To determine your maximum monthly payment, multiply your gross income by 0.36 and divide it by 12. This will give you the expenditure of debt, including your housing payment, that you should not exceed each month.

Determining Your Down Payment

There’s a lot of talk around the ideal amount you should put forward for a down payment, but this percentage can directly impact the amount of the house you can afford. If you are able to put down 20% of the purchase price of your home, this means your monthly mortgage payments will be minimized and this will decrease your DTI ratio. While a home may be out of your reach if you can only put 10 or 15% down, 20% down will ensure a higher amount of disposable income on a monthly basis, making your application more feasible.

Determine Your Lifestyle

While a lender may not reject your application outright if your debt-to-income ratio is higher than suggested, it’s important to know what kind of spending choices make sense for you so that you can make your monthly payments. If you have limited expenses above your mortgage and enjoy a Spartan lifestyle, it’s entirely possible that you’ll be able to manage a higher monthly amount. However, if you don’t have stable employment and are struggling each month, it may be a good idea to consider a less expensive property.

The monthly mortgage payment for your dream home may look like it’s manageable on the surface, but if your DTI ratio exceeds what is suggested, there may be issues with acceptance of your application. If you’re currently in the market for a new home, give me a call for more information – J.P. Cook – 602-320-4253.

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23393 W Winslow Avenue Buckeye, AZ 85326

$491,213

5 Beds

3 Baths

2,624 SqFt

Status Active

MLS # 6638299

Property Type Single Family Residence

Price Type --

Perfect Layout!! Finished 5 Bedroom 3 bathroom + HUGE loft upstairs! Large Kitchen With covered patio! Stop by and ask about our whole house air purification system incorporated into the architecture of this home, or home automation that saves money on utility bills, bringing you peace of mind and unlimited freedom.

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16027 W Silver Breeze Drive Surprise, AZ 85374

$491,000

3 Beds

2 Baths

2,298 SqFt

Status Active

MLS # 6648850

Property Type Single Family Residence

Price Type --

Immaculate residence with a well-maintained exterior requiring minimal landscaping effort both in the front and back. Step into a welcoming ambiance with tall vaulted ceilings and a tasteful two-tone color palette. Revel in the elegance of tile and wood-like flooring in common areas, complemented by carpets in select rooms. The home is adorned with beautiful white shutters, recessed canned lighting, and ceiling fans for optimal temperature control. The kitchen is designed for entertaining, offering an eat-in area seamlessly connected to the living space, or choose to host formal dinners in the dining room. The kitchen boasts a striking Spanish tile backsplash, an island, and sleek all-black stainless appliances. The primary suite is generously sized, featuring a spacious bathroom with a double sink vanity, walk-in shower, and an expansive walk-in closet. Discover a bonus linen room/closet/pantry, versatile for various needs, even as a potential desk area. The garage includes an extra storage room catering to all your organizational requirements. Unwind in the backyard, where a pergola provides a perfect setting to enjoy breathtaking sunsets, accompanied by ample space for entertaining. Don't miss the opportunity to experience this captivating home - Must See Today!

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3133 N Medallion Court Casa Grande, AZ 85122

$491,000

5 Beds

3 Baths

3,555 SqFt

Status Active

MLS # 6692083

Property Type Single Family Residence

Price Type --

Welcome to this stunning 5 bedroom, 3 bathroom residence in the highly sought-after Villago neighborhood! As you step inside, you'll be greeted by soaring high ceilings and vibrant colors that create a warm and inviting atmosphere. The spacious floor plan boasts plenty of natural light, and the elegant staircase with dual entries makes a striking first impression. The extra-wide 2 car garage provides ample space for parking and storage. The picturesque property is surrounded by lush trees and features grass front and back yard, perfect for outdoor entertaining or relaxation. Additionally, the cozy loft area offers a quiet nook for reading, studying, or other small activities. With its prime location and desirable features, this home is the perfect blend of comfort, style, and convenience.

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40274 W Michaels Drive Maricopa, AZ 85138

$490,995

5 Beds

3 Baths

2,570 SqFt

Status Active

MLS # 6681266

Property Type Single Family Residence

Price Type --

The heart of this ranch floor plan is an open layout with a great room, a breakfast nook and a gourmet kitchen with a walk-in pantry and a center island. The owner's suite is adjacent, and showcases a generous walk-in closet and an attached bath with double sinks and deluxe shower with separate tub. 4 additional bedrooms and two baths round out the residence. A 3-car garage and a covered patio are also included!

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22871 E Watford Drive Queen Creek, AZ 85142

$490,993

3 Beds

2 Baths

1,775 SqFt

Status Active

MLS # 6632666

Property Type Single Family Residence

Price Type --

This is a brand new Quick Start Home under construction in Queen Creek, with a Spanish elevation. 3 bed, 2 bath, plus den. Stainless Steel Whirlpool kitchen appliances include gas range, microwave, and dishwasher. Move in anticipated for May. Homesite has desirable north/south orientation. Please ask about our special financing incentives!

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4134 W Nora Drive San Tan Valley, AZ 85144

$490,610

3 Beds

2 Baths

2,232 SqFt

Status Active

MLS # 6688554

Property Type Single Family Residence

Price Type --

Beautiful Ranch elevation with Gourmet kitchen, stainless steel appliances. 3 bedroom plus flex room and 8' interior doors.

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11011 N Zephyr Drive Fountain Hills, AZ 85268

$490,500

2 Beds

2 Baths

1,460 SqFt

Status Active

MLS # 6685647

Property Type Apartment

Price Type --

**STUNNING CONDO WITH MOUNTAIN VIEWS** Discover the allure of Fountain Hills living in this inviting condo boasting breathtaking Four Peaks Mountain views from its spacious back patio. Enjoy cozy evenings by the propane fireplace and grill, or retreat to the master bedroom featuring wood tile floors, patio access, and a luxurious en-suite bathroom featuring a duvet. The open floor plan encompasses a modern kitchen with a brand new dishwasher and an electric fireplace in the living room. Community amenities include a pool and hot tub. Don't miss out on this Fountain Hills gem

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17706 W Hatcher Road Waddell, AZ 85355

$490,010

3 Beds

2.5 Baths

2,052 SqFt

Status Active

MLS # 6674723

Property Type Single Family Residence

Price Type --

This Gorgeous sprawling floor plan has 2052 SF , w/3 bedrooms, 2.5 bathrooms, and a 3 car tandem garage! Almost ready for you! Est COE in Jun/Jul 2024. This home features a fresh, neutral color palette, offering 36'' white shaker cabinetry, a large kitchen island, white quartz countertops, 9' ceilings and tile flooring. It also includes features you'll love like a soft water loop, under cabinet lighting in the kitchen, dual pane low-E windows, multi-zone thermostat, and a smart home system. The exterior features front yard landscaping, a covered patio and private backyard. Conveniently located off the 303, this gated community is near Costco, Walmart, and shopping. **Finishes may vary from sample photos and virtual tour.

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889 W Old Stewart Road Willcox, AZ 85643

$490,000

3 Beds

2 Baths

1,202 SqFt

Status Active

MLS # 6385022

Property Type Manufactured Home

Price Type --

Begin your homestead/farm today! House has a private well, there is also an irrigation well. Property is fully fenced, and cross fenced for animals. Use the acreage for grazing cattle, or to grow crops. Bordered on 3 sides by paved roads. Enjoy beautiful views in all directions and wide open spaces. Property is a total of 4 parcels being sold together, totaling 266 acres.

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6438 W Mercer Lane Glendale, AZ 85304

$490,000

3 Beds

2.5 Baths

1,570 SqFt

Status Active

MLS # 6628488

Property Type Single Family Residence

Price Type --

This home is the absolute definition of ''turn-key''. From solar panels and a brand-new roof to new carpet, paint and appliances the list of improvements are too long to list in this description (ask for the list)! With over 90k worth of improvements this home sits ready to go on a corner lot and with NO HOA. With one of the larger lots in the Montara community, you will find yourself walking distance to a fantastic neighborhood green belt and community parks. Welcome home!

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40637 W Hopper Drive Maricopa, AZ 85138

$490,000

3 Beds

2 Baths

2,288 SqFt

Status Active

MLS # 6644751

Property Type Single Family Residence

Price Type --

Incredible single level home on a huge lot with a pebble-tec pool! This home has been meticulously cared for and boasts a split floor plan with 3 bedrooms, 2 bathrooms, den, formal living, dining room, huge great room and oversized 3 car garage! The kitchen features granite countertops, a new stainless steel stove, new microwave, new dishwasher, and a new RO system that feeds into the refrigerator and the sink! And there's more...the HVAC is only 4 months old and the tile floors were recently stripped and resealed! The sparkling pool was drained and media blasted last summer, and the new 6x8 shed will convey with the sale! The desert landscaping is not only beautiful but low maintenance. Come see this home today because this one won't last!

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20813 W Minnezona Avenue Buckeye, AZ 85396

$490,000

3 Beds

3 Baths

1,771 SqFt

Status Active

MLS # 6653557

Property Type Single Family Residence

Price Type --

This home has an Energy Star rating for energy efficiency. Located within the award winning community of Verrado & the active adult neighborhood of Victory, this well kept 3 bedroom, 2 bath, 3 car garage home has nice views of both the Whitetank & Estrella mountains. The 3rd bedroom has double doors that allow it to be an office or den. It is one level home, tile floors, beautiful cabinets & just a few years old. Landscaping is low maintenance & the driveway is pavers. Come look at this wonderful home that is ready for you to move in now. Washer, Dryer & refrigerator are included. Verrado has medical services, eateries, CVS pharmacy, multiple grocery stores, over 60 parks, established hiking trails, vet services & more. The Victory HOA also has a gym for active adult residents

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