"How much house would I be able to afford?" Have you asked yourself question and are still looking for the answer? Well, I’ve got the answer for you.
there’s not a magic dollar sum you should be looking for involving the "ideal house". How much house you can afford is as unique as you are; it’s grounded on numerous things, like your location, your monthly income, how much savings you have, personal tastes, and above all, the home-purchasing plan you have put together.
The best way to buy a house is the one-hundred-percent-down plan. Sounds strange, doesn’t it?! But think how much fun that would be! Don’t borrow money. Period. If I can’t get you to put off the purchase that long, I very much suggest you start saving a down payment of 20 percent or more, pick out a 15-year (or less) fixed-rate mortgage, and restrict your monthly payment to 25 percent or less of your monthly take-home pay.
You want your newly acquired house to be a blessing, not a bane. If you buy a house with nothing down and a large monthly payment, you’re inviting Murphy to move into the extra room. You do NOT want Murphy in your house – believe me! Slow down and realistically deliberate everything before you jump head-first into making this huge purchase. If you don’t, you will simply be issuing Murphy an open invite to take over your home.
Here’s a short and quick checklist of crucial questions you need to go over as you consider how much house you think you can afford. If you cannot answer YES to the following questions regarding the home you are interested in, then it is not a good move to buy it right now.
- Can I make at least a 10 percent (preferably 20%) down payment on the house?
- Will I be able to keep house payments at or less than twenty-five percent of my monthly net income?
- Will I be able to afford to take out a 15-year fixed-rate loan?
- Am I working closely with an agent I can rely on?
Enjoy house-hunting!