Buying a house can be an intimidating feat. Not only do you have to pay the initial costs of furnishing, but only a month after moving day, a mortgage bill awaits in your mailbox. Although it may seem overwhelming at first, getting ready to buy a house does not need to be a difficult experience.
The first thing to consider in looking for a dream location is how much of your income will actually flow in on a monthly basis—but it doesn’t stop there. The next step is to subtract pre-existing debt (such as credit card payments and auto loans, among others) as well as other small expenses that will inevitably appear each month. The remaining total can help you be sure you will have enough left to make mortgage payments.
Another method involves taking the total monthly income and multiplying that by 0.28 to find out how large of a monthly payment you can reasonably afford to make without breaking the bank.
However, there is more to the picture than just the monthly mortgage payment. Other costs include property taxes, homeowner’s insurance and, for those who make a smaller down payment, mortgage insurance as required by the lending industry. Working with a mortgage lender and using an online home affordability calculator can help individuals double check their calculations to ensure they can not only afford their dream home but will actually enjoy buying it.
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