Figuring Out How Much You Can Afford
You might be asking how much mortgage can I afford? When you look at the situation in terms of monthly cash flow, this makes a big difference. As you start thinking about the type of home you want to buy, make sure that you pay attention to the monthly payment, and how it fits into your regular budget.
There are different rules of thumb that can help you figure out how much home you can afford. Some suggested that you should limit your mortgage payment to 30% of your monthly income.
While the 30% rule can be a good start, the reality is that you need to consider what makes you comfortable. Look at your situation. Consider how much debt you already have. If you have a lot of debt, you need to keep your mortgage payment low. Additionally, you should also consider what might happen if you lose some of your income. You don’t want to have a mortgage payment that is so high that you are worried about defaulting if something goes wrong.
If you put together a decent down payment, and if you can be realistic about how much house you really want to buy, you can qualify for a mortgage!