Can I Afford a Mortgage?
This is a question all buyers are asking. From first-time buyers to buying experts alike, everyone needs to know if this is something they can afford and if it is the right financial move. Below you will find an overview of income, budget, and savings that will help you determine if this is the right move for you!
Do you have stability in your job? Job security is huge when applying for a mortgage! Are you or your co-borrower planning on having a big bonus or pay increase? If so – congrats! If not, are you at least banking on your incomes staying the same?
Is the stork going to be visiting your house soon? Planning for a child is an exciting time but it will definitely change your budget! If you’re planning on expanding your family make sure you take in to consideration baby expenses/if one of you decide to be a stay-at-home parent.
Budget, Budget, and Budget Again!
If you didn’t catch it from the header, budgeting is important! While many know how much they make each month, not everyone knows how much they spend per-month. This can lead to a slippery slope to debt. Even with mortgage rates being low, not paying attention to your monthly spend may give you a false sense of security. Know how much you have, plan what you are going to spend, and stick to that plan!
You should be putting less than 36 percent of your income toward your debts. This includes principal and interest payments, credit card payments, and car payments. If you go above 36 percent you may put yourself at risk if something unexpected were to happen that you needed money for. Make sure to stick within your budget so you can save and not live paycheck-to-paycheck.
When thinking about buying a home you need to consider all the related costs; down payment, closing costs, and that new principal and interest payment you’ll have! You will definitely need to save for a down payment, most will fall between the 3.5%-20% range, unless you qualify for one of our awesome no down payment loans. Like stated before, you need to have enough cash in your savings in case of an emergency. Better safe than sorry!
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