Are you looking to become a homeowner but are unsure what you can afford? Title & Escrow has come up with an easy to follow guide to help make sure you get the best deal on your mortgage.
You can start by determining your monthly income. If you have a co-buyer you will of course need to account for their monthly income as well. The next thing you’ll need to determine is how much you’re willing and able to pay for housing cost and a down payment. Take into consideration how much you’ll need to pay for things like insurance, mortgage rates, and the terms of a loan. A very important step will be to precisely add up your monthly expenses. This is the most fundamental aspect of determining what you can afford when buying a house. If you fail to be precise you may end up with a mortgage you don’t have the money to pay back. You may also want to consider any emergency expenses that could pop up.
Almost all financial advisers recommend paying at most 28 percent of your monthly gross income on general expenses and 36 percent on overall debt. Account for things like student loan payments, monthly car upkeep and payments, and your credit card bill. Making a 30 year plan is highly suggested so that you don’t run into trouble down the road. Because the terms of your mortgage will dictate what your housing budget looks like it’s best if you consult various lenders to set up a mortgage you can realistically afford to pay off.
We’re seeing low mortgage rates right now. If you’re serious about becoming a homeowner, the timing has never been better to take out a mortgage loan.