Many people who want to have your house make a great effort to clean up your credit, pay your debts and keep their financial lives in order before you start house. But many of them do not take the time to seek advice financial before buying your new home. As a result, they may fall prey to agents and realtors unscrupulous who are trained to sell the bigger house, regardless of financial circumstances. Before signing, you discover how much house you can actually afford.

Know your budget

The first step is to assess your level of income. The general rule for many financial planners is that the mortgage should not be higher than 25% of the total salary of the buyer. Therefore, a person with an annual salary of US $ 40,000 must be no more than US $ 708.33 total monthly amount.

Insurance and taxes

Do not forget to include insurance and taxes in your calculations. These substantially increase the amount of monthly payment and not consider entail financial problems in the long run. Your mortgage broker or your insurance agent should give a reasonably accurate estimate.

Look at the rest of the budget

The rest of the budget should also be taken into account. For example, if a prospective buyer is paying for your car and it takes you a third of your salary, then the mortgage payment should probably be less than normally suggested or be required to pay for your car decreases.

Future plans

The future wage buyer is also a factor to consider. If the mortgage payer realistically expect to receive a substantial salary increase or a promotion within the next two years, an adjustment may be feasible on your mortgage. This strategy carries a risk, because if the salary increase does not happen, then the purchased will be trapped in a mortgage that may be unable to pay.

Savings

Make sure you can still save money each month after paying your mortgage. It is not wise to use your home as your only source of capital, no matter how is the housing market. It is important to have liquid assets that can be used in an emergency, it is better to rely on a home equity loan.