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So, you’ve decided you’re ready to buy a house on St. Croix. What now? Compiling your wish list and looking at listings is the fun part, but understanding what you can afford is the smart place to start.

As a general rule, you should be able to purchase a home with a value of two or three times your annual household income. That said, the amount you can borrow will also depend on your credit history, employment history, savings and debts.

Mortgage Pre-qualification

Pre-qualification by a mortgage lender or broker is good first step in your home buying adventure. Going through the process of pre-qualification will help you better understand your price range and will help your Realtorâ„¢ find appropriate homes for your consideration.

According to Bonnie Rapine of Schaffer Mortgage, pre-qualification can be done over the phone in about 10 minutes. You will need to provide your income, asset and liability information in order to establish how much you should be able to afford to borrow. Pre-qualification typically lasts for 90 days before documentation expires and needs to be updated.

Sellers pay much more attention to offers from buyers who are pre-qualified for a home loan because it indicates that the sale is more likely to be successful. Plus, if an offer comes down to a bidding war, a buyer who has been pre-qualified will have an advantage over one who has not.

Sometimes your pre-qualification amount may be higher than you expected. Pre-qualification indicates how much you should be able to borrow, not necessarily how much you believe you want to spend. Only you know your financial goals and limitations, and you should set your price range accordingly.

Contact Bonnie at 340-778-4444 to discuss pre-qualification for buying a home on St. Croix.