Purchasing a home necessarily involves shelling out a lot of money in monthly intervals over a pre-determined period of time. Knowing how much you can afford, though, is a lot more than just finding out how much you can pay each month. Here are some financial tips that you should remember when buying a house:
If you and your prospective lender are to be assured that you can pay your mortgage every month for the next 15 or 30 years, you should have a stable job at a firm that isn’t experiencing financial troubles. However, if your company is laying off people, you might be better off waiting for things to improve before buying.
Then, you should also have enough funds handy to pay for about six months’ worth of your regular expenses (this should include food, transportation and utilities). This should serve to offset the risk of falling into financial trouble in case your employment does go awry and you end up without a steady income source for months.
How much can you afford to pay in mortgage per month? Many organizations advise that it should be approximately 28 percent of your gross monthly income. The further you go over this amount, the more you are at risk of bleeding the rest of your expenses dry just to keep up with your monthly mortgage.