Know How Much House You Can Afford
Posted April 13, 2014


For most home buyers there is a usually a monetary difference between the ideal house and the house that they can afford. Being able to qualify for a loan in a certain amount is important, but what counts more is how much of a mortgage the future homeowner is able to maintain over a period of time. It's important to know, and stick to, what you know can comfortably afford.

First look at your basic numbers. These include annual household income, any reoccurring monthly payments such as student loans, car payments and basic household expenses (which will may increase with a new home). Do you have available money in savings to apply toward your down payment?

Are you satisfied with your employment position, or maybe you're contemplating going back to school. Hopefully your future holds multiple increases in pay, but in these economic times being laid off from a job, if only temporarily, can be a possibility also. Furthering your education is always a plus but there is a cost to that also in time and money.

What size family do you have now and what are the future plans? Considerations such as these can make a big difference in what you can afford now and what's comfortably affordable later. Daycare for children is not cheap and could last for years, depending on how many children you have. That can cause a strain on your future budget if not taken into account when looking at your future home expenses.

It is recommended you have at least six months' worth of living expenses saved to safeguard against unforeseen events. Unemployment, divorce, illness or death can suddenly compromise your ability to pay your mortgage. Think hard on what you would need to have in order to feel secure monetarily before taking the home buying step. Getting the home you want is wonderful, having the peace of mind and reassurance of having planned ahead is great.

Posted By: Michelle Keaton-Barrow
April 13, 2014 09:43 PM




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