02/04/2022
Only look at homes you feel confident you can comfortably afford -- it’s one of my top tips for homebuyers. 🏡
Today’s FAQ Friday tackles the question: How do I know how much home I can afford?
To get an idea of what you can afford, you'll need to take into account the following:
🔑Your down payment
🔑Your household income
🔑Your current debts (liabilities) and your monthly payments associated with those debts
🔑Your estimated monthly housing-related costs, including mortgage payment, property taxes, property insurance, condominium fees utilities and maintenance costs
🔑Your anticipated closing costs and other one-time costs
🔑Your current spending practices
• Most experts recommend using the 28/36 rule which means you shouldn't spend more than 28% of your gross monthly income on housing and 36% on total debt (including your mortgage, credit cards, and other loans like auto and student loans).
• For example, if your salary is $75,000 per year, your gross monthly income is $6,250 ($75,000 divided by 12). Your total housing costs (principal, interest, taxes, and insurance) shouldn’t exceed $1,750 per month (28% of $6,250).
• Keep in mind the 28/36 rule is just a general guideline. Adjust the percentages to your own comfort level and financial goals.
Have you done the math and you're ready to see some homes? Send me a message and let’s start your home search TODAY!🏡
