January 28th, 2018 11:02 AM by Jackie A. Graves
Whether you’re a first-time buyer looking for the perfect
starter house or a seasoned pro trading up to your waterfront dream home, you
are probably asking the same questions: Can I afford this? And is this the right move
at the right time?
get a more accurate picture of what you can afford to borrow, you should
analyze three things: you and your co-borrower’s income, your budget and your
very important to know not only how much you earn but how much you spend per
month. Even with low mortgage
rates, a mortgage payment and the additional monthly expenses that
go along with owning a home could break your budget.
should outline how much you currently spend on the following categories: auto
and transportation, bills and utilities, education, entertainment, food and
dining, gifts and donations, health and fitness, home, kids, personal care,
pets, shopping, taxes, travel and other miscellaneous monthly expenses. How
much do you have left over to put toward a mortgage?
typical rule of thumb is you should not put more than 36 percent of your income
toward debts (mortgage
payments, car payments and credit card payments), 31 percent toward
taxes and then have 33 percent for everything else (including savings or
investments). Of course you will probably have to consider other factors such
as the average cost of living in your area, median house prices and your
immediate need for more or different housing space.
will likely need a significant down payment in
order to buy a new house (mostly likely 3.5 percent or more; 20 percent down is
the most common). Do you think you will have enough money for the necessary
down payment, closing costs, plus the new monthly mortgage payment? Will you
have enough money either in your savings or your monthly budget to buy
discretionary items? Do you have enough money in savings in case of an
emergency such as an injury or a broken water heater?
is important to not completely raid your savings when you buy a new house. It
is always advised to expect the unexpected with homeownership. In general, you
should budget 1 to 3 percent of your budget on house repairs and maintenance.
easily determine how much house you can afford, use our home
you’ve determined how much you can afford, start shopping for real-time
mortgage rates here.
To view the original
article click here