Affordability is the first step in buying a home. In South Brooklyn, your budget depends on several key factors that determine how much you can comfortably afford, not just what you qualify for on paper.
1. Income and Debts
Lenders look closely at your debt-to-income (DTI) ratio, which compares your monthly debt payments to your monthly income. This helps them see how much room you have for a mortgage. A lower DTI shows that you manage your finances well and can handle homeownership costs. Paying down existing debt before applying for a loan can improve your chances of approval and help you qualify for a better rate.
2. Down Payment
Your down payment directly affects your monthly mortgage costs. The larger your down payment, the less you’ll need to borrow, which means lower monthly payments and less interest over time. Many buyers aim for 20% down to avoid private mortgage insurance (PMI), but some programs allow as little as 3% or 5% down. It’s about finding a balance that fits your savings and long-term financial comfort.
3. Closing Costs and Taxes
It’s easy to focus on the price of the home, but closing costs, property taxes, and insurance can add up quickly. Closing costs typically range from 2% to 5% of the purchase price and include fees for the lender, attorney, and title company. Property taxes also vary by neighborhood, so make sure you factor them into your overall budget to avoid surprises.
4. Pre-Approval
Getting pre-approved for a mortgage gives you a clear picture of your buying power before you start shopping. It shows sellers you’re a serious buyer and can make your offer stronger in a competitive market. Pre-approval also helps narrow your home search to properties within your true price range, saving you time and stress.
Buying smart means choosing a budget that fits your lifestyle, not just what the bank says. Think about your comfort level with monthly payments, ongoing maintenance, and other living expenses. The right home is one you can enjoy without stretching your finances too thin.
—
Joseph Ranola | Five-Star Staten Island & South Brooklyn Realtor® (30 + Google reviews)
Associate Broker · Matias Real Estate | Founder · Bridge & Boro Team
Serving 103xx and 11209 / 11214 / 11228 | $25 M + closed volume
📞 917-716-1496 | RanolaRealEstate.com
