There are a number of things you need to consider when deciding how much house you want to buy. This article from Redfin shares 5 tips you can use to help determine how much house to purchase. Enjoy the article and let me know if you have any questions. As always, please reach out for any of your real estate needs.
Tim Houterloot - Broker/Realtor
317-997-0165 - Cell
indyhomepro@outlook.com
Source: Redfin | Repost Houterloot 2/2/2023 -
Once you’ve decided to buy a house, the next step is to decide how much you can realistically afford. To help you get started and make the process easier, here are five tips to follow when deciding how much you should spend on a house.
1. Understand what percentage of your income should go toward your mortgage
To calculate how much you can afford to pay for a mortgage each month, start by adding up your gross annual income from all sources, including salary, wages, tips, and commissions. If you have a spouse or partner whose income will also contribute to the mortgage, make sure to include that as well. Divide the total by 12 to get your monthly income, and use that figure as the basis for your mortgage calculations.
Once you’ve determined your monthly income, it’s time to follow the 28/36 rule. According to this rule, you should not allocate more than 28% of your monthly income to housing and no more than 36% to all outstanding debts, including your mortgage. By staying within these parameters, you will have sufficient funds for groceries, fuel, holidays, and saving for your future.
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