4 Ways to Improve Your Buying Power

When it comes to shopping for your next home, your buying power is your combined purchasing potential!

When it comes to shopping for your next home, your buying power is more than just how much home you can afford. It is your combined purchasing potential! This can include:

  • The amount of money you have available each month for a mortgage payment, after your fixed bills and expenses.
  • Any money that you have saved for the down-payment.
  • The proceeds from the sale of your current home, if applicable.
  • The amount of money you are qualified to borrow.

Once you take these factors into account, you’ll have more clarity on how much home you can afford without overestimating or underestimating your buying power. Below are four things to keep an eye on if you’re hoping to increase your buying power!

Credit Score

Your credit score is a good indication to lenders of how responsible you are at borrowing money. A higher score can help you lock in a lower interest rate, which will leave you with more funds each month to put toward a mortgage payment.

Debt-to-Income Ratio

Your debt-to-income ratio, or DTI, is a calculation of your total debt divided by your gross monthly income. If your DTI is a little too high, it means more of your income each month will be going to your debt instead of your mortgage or in an emergency savings fund. To increase your buying power, try to lower your DTI as much as possible before shopping for a home.


Don’t underestimate the importance of including all your existing assets! Your lender can decide how risky of a buyer you are by looking at not only checking and savings accounts but also the amount of equity you have tied up in other assets. Just make sure you can verify the value of all your assets and prove that they belong to you!


Put simply, the more you’re able to put down the less you’ll have to borrow. With a down-payment of 20% or more, you won’t have to pay private mortgage insurance (PMI) each month and because more money down is seen as less risk to the lender, you may even be able to negotiate a lower interest rate.

When shopping for a new home, affordability often goes beyond the home’s list price. After all, the sales price does not include all the housing-related expenses that will be included in your monthly payment. Understanding your buying power can help you get the home you want without sacrificing your lifestyle!