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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1500 E Wahalla Lane Phoenix, AZ 85024

$560,000

3 Beds

2.5 Baths

1,679 SqFt

Status Active

MLS # 6757567

Property Type Townhouse

Price Type --

Luna Azul is a unique gated Community Where residents of every age can live in a neighborhood managed by 24-hr on site staffing. An RN onsite 24hrs a day. The 1679 Sqft Alma floorplan offers 3 beds 2.5 baths and spacious covered front and back porches. Interior features: Designer Finishes, & window treatments.1st floor En-Suite bedroom, high performance exterior wall and roof insulation, energy efficient HVAC, LED lighting ,Brand name appliances, Quartz countertops, cabinets with soft close doors & drawers. Community amenities include landscaped grounds, a 4000+sqft Club house with multi-purpose activity rooms and recreational facilities, an outdoor pool and large space for gatherings. Conveniently located near transportation, social, recreational and cultural opportunities and activities Professionally landscaped low maintenance back yard with artificial turf and dwarf palms just beyond the covered patio. Monthly planned events at the Clubhouse. Medical assistance onsite 24hrs a day by a a register nurse who lives onsite.

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20883 E Cattle Drive Queen Creek, AZ 85142

$560,000

4 Beds

3 Baths

2,352 SqFt

Status Active

MLS # 6742557

Property Type Single Family Residence

Price Type --

You will not be disappointed the moment you walk into this 4BR, 3BA, 2CG located in a well developed Queen Creek area. Very spacious with high high ceiling. Large kitchen with high end upgrades such as granite counter, gourmet kitchen, gas cook top, 42 inch upper cabinets, stainless steel appliances, recessed lighting. neutral ceramic tile flooring thru out the house. The open floor plan of the family room, kitchen & dining area will give you plenty of room to entertain all of your guests. Large laundry area. Epoxy flooring in Garage and Paver drive-way. Desert landscaping in the front for low maintenance and a beautiful backyard with covered patio for your relaxing and entertainment after long day work, paver, fake grass, with no house in the back. EZ access to freeway. Close to school

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8143 W Salter Drive Peoria, AZ 85382

$560,000

5 Beds

3 Baths

2,465 SqFt

Status Active

MLS # 6751158

Property Type Single Family Residence

Price Type --

Freshly painted Ext/Int 5BR, 3BA, 3CG located in well developed Fletcher Heights neighborhood, new stainless steel stove and dishwasher. Very bright and spacious floor plan with high ceiling. Spacious kitchen over look the family room. Laminate flooring thru out the house. Ceiling fan in every room for your comfort. Low maintenance front with desert landscaping. Large backyard with a swimming pool for your family enjoyment in the summer time, low maintenance desert landscaping with artificial grass . Formal dining and living room. Very large Owner bedroom with double sink, separate tub and shower and a large walking closet. Close to shopping, schools, park, restaurant and easy access to loop 101

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4925 W Buffalo Street Chandler, AZ 85226

$560,000

4 Beds

2 Baths

1,802 SqFt

Status Active

MLS # 6770215

Property Type Single Family Residence

Price Type --

You'll love to own this incredible 4-bedroom, 2 bath property, now for sale! Charming curb appeal with a low-care front yard and a 2-car garage. The interior features spacious formal living areas perfect for hosting and entertaining. Vaulted ceilings, soothing paint, kitchen is complete with SS appliances, ample counter space, Island and handy pantry. Primary bedroom features a full ensuite, separate tub and shower and a walk-in closet. The backyard invites you to relax and have fun with its covered patio and a fenced pool. Roof is 4 years old and AC unit only 2 years old. Awesome location! Less than a mile away from Intel. Surrounded by shopping, dinning and entertaining. No HOA on this gem! Hurry, this home won't last long

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6012 E Vernon Avenue Scottsdale, AZ 85257

$560,000

3 Beds

2 Baths

1,860 SqFt

Status Active

MLS # 6770543

Property Type Single Family Residence

Price Type --

Step outside to panoramic views of the Papago Mountains from your front courtyard and Camelback Mountain as the perfect backdrop from your private back patio. This 3-bedroom, 2-bath home offers privacy along a lush greenbelt and features a BRAND NEW ROOF with all new plywood decking ($44k), w/warranty, and the A/C unit has been replaced so you can chill out. Enjoy an oversized patio and yard, a wood-burning fireplace, and access to a hillside pool. Similar remodeled homes have sold for $800,000—this one is full of potential. Located minutes from Old Town, Tempe, ASU, SkySong, and the airport, it's a hidden gem in the heart of the city.

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16733 E Duane Lane Scottsdale, AZ 85262

$560,000

3 Beds

2 Baths

1,512 SqFt

Status Active

MLS # 6773011

Property Type Single Family Residence

Price Type --

Discover your perfect retreat in the serene Rio Verde Foothills! This stunning home offers mountain views and the freedom of no HOA. The open floor plan features a beautiful kitchen with granite countertops and ceramic wood-style tile flooring, adding warmth to every space. The expansive backyard, complete with an RV gate and power hookup, is a blank canvas for outdoor projects or relaxation. Customize the property to fit your lifestyle. Nestled in a peaceful location with access to nearby amenities, this home blends style, practicality, and tranquility. Have no worries as this great home is signed up with EPCOR! You won't want to miss this home!

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5428 N 188th Lane Litchfield Park, AZ 85340

$560,000

4 Beds

2.5 Baths

2,140 SqFt

Status Active

MLS # 6777098

Property Type Single Family Residence

Price Type --

Beautifully appointed home featuring 4 bedrooms, 2.5 bathrooms, and a 3 car tandem garage situated on a premium corner lot with welcoming views of the nearby White Tanks. The well designed split floor plan offers maximum privacy with the primary bedroom separate from the 3 secondary bedrooms. Entire interior freshly painted and thoughtfully designed with wood-look tile, impressive light fixtures and plenty of natural light. Kitchen boasts a large island, stainless steel appliances, gas range, a beverage cooler, quartz counters and modern white cabinets. Step into the oversized low maintenance backyard to find a patio with a large grassy area perfect for entertaining or for kids to play.

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18194 N 59th Lane Glendale, AZ 85308

$560,000

4 Beds

3 Baths

2,336 SqFt

Status Active Under Contract

MLS # 6693069

Property Type Single Family Residence

Price Type --

NO HOA! Welcome home to this tri-level oasis with a private pool and no HOA. Nestled in the heart of North Glendale this home is on an oversized, cul-de-sac lot on the corner, this 4 bedroom 3 bathroom house has it all! Recently added RV gate allows you to store all your toys. The interior offers a tri-level experience with open living spaces for all your needs. There is a full bedroom and recently updated bathroom on the bottom level. In the kitchen you'll find an open concept with granite counter tops and plenty of storage. Step outside into your private backyard retreat and enjoy the sparkling pool perfect for the Arizona heat! Home is located conveniently near all your shopping and restaurant needs as well as close to major freeways. Come see this home before it's gone!

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1821 W Lacewood Place Phoenix, AZ 85045

$560,000

5 Beds

3 Baths

2,904 SqFt

Status Active Under Contract

MLS # 6703351

Property Type Single Family Residence

Price Type --

You'll LOVE this beautiful 5-bed, 3-bath home in the peaceful Foothills Club West! Nestled adjacent to a common area, it displays a 2-car garage, well-manicured landscape, & cozy front porch. Welcoming interior features tons of natural light, designer paint, carpet & tile flooring t/out. Perfect for entertaining, this gem boasts a living & dining room combo and an inviting family room that opens to the kitchen! The impressive kitchen has SS appliances, granite counters, recessed lighting, a pantry, espresso cabinetry w/crown molding, and an island w/breakfast bar. Versatile loft upstairs! Large main bedroom features an ensuite dual sinks & a sit-down shower. Outback, you have a covered patio, artificial turf, & well-laid travertine & solar to save! Enjoy the mountain views surrounding it. Home also features leased solar that offsets on average 53% of their utility bill!

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17810 W Summit Drive Goodyear, AZ 85338

$560,000

4 Beds

2 Baths

2,381 SqFt

Status Active Under Contract

MLS # 6722662

Property Type Single Family Residence

Price Type --

WOW!! Rare opportunity to own one of the few preserve lots in Estrella. Private setting with beautiful views, this premium lot (nearly 13,000 square feet) is a ''ONE OF A KIND''. Well kept home boasting 2381 square feet, 4 bedrooms & 2 baths is nestled by both lakes and all Estrella has to offer! Spacious kitchen opens to your family room with a fireplace & views of your incredible yard. An additional dining & living room or flex space for an office/ den. All the big ticket items have been done for you...NEWER ROOF, NEW PEBBLETEC POOL & TILE , NEW AC PLUS WINDOWS HAVE ALL BEEN REPLACED. Outside enjoy the oversized lot with FANTASTIC VIEWS perfect for entertaining. A refreshing pool, gazebo, BBQ, planter boxes, covered patio & of course the preserve as your neighbor. Buyer to verify info

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706 W Curry Street Chandler, AZ 85225

$560,000

3 Beds

2 Baths

2,208 SqFt

Status Active Under Contract

MLS # 6757486

Property Type Single Family Residence

Price Type --

Welcome to your dream home in the sought-after Mission Valley neighborhood of Chandler! This spacious single-level home features a desirable split master bedroom floor plan, 3 bedrooms, 2 bathrooms, and a versatile den perfect for an office or guest room. Sitting on an expansive lot, featuring lush, mature landscaping, creating a private oasis complete with a sparkling pool, perfect for entertaining or relaxing. The 2.5 car garage provides ample space for storage or a workshop. With its prime location near top-rated schools, parks, and shopping, this home is perfect for those seeking comfort and convenience in a peaceful setting.

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1228 E Wesleyan Drive Tempe, AZ 85282

$560,000

3 Beds

2 Baths

1,486 SqFt

Status Active Under Contract

MLS # 6758491

Property Type Single Family Residence

Price Type --

Prime Tempe Location! This stylish 3-bedroom, 2-bathroom home with 2-car garage is just minutes from ASU and the freeways. The kitchen boasts sleek stainless steel appliances, granite countertops, and seamlessly flows into the dining area. Enjoy the additional living space in the separate living room which opens to the backyard. Recently updated with new flooring installed in 2024, this home features a distinctive and modern look. The backyard is perfect for entertaining, with a covered patio, misting system and a refreshing diving pool. The property is situated among single-story homes, offering added privacy. New roof. No HOA. Come see it today!

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