Take a look at the best tips to buy a home within your comfort zone

Take a look at the best tips to buy a home within your comfort zone

If you are planning to buy a new home make sure it is your best option and will not permanently damage your finances. In this article, you will discover the best tips and tricks to stay financially fit and still purchase your dreamed house. Keep reading and discover much more!

If you are planning to buy a new home make sure it is your best option and will not permanently damage your finances. In this article, you will discover the best tips and tricks to stay financially fit and still purchase your dreamed house. Keep reading and discover much more!

First of all, you should know that a monthly payment isn’t just the principal and interest payment on your loan, but also taxes, insurance and, depending on your down payment amount, private mortgage insurance (PMI). 

If you are planning to buy a new home make sure it is your best option and will not permanently damage your finances.

Before you fall in love with a home, and even before you start looking at homes, take the time to put together a budget. Even if you’ve been prequalified for a mortgage loan amount, check to make sure what mortgage payment will fit within your lifestyle without putting any other financial plans on hold.

Once you have a budget set, you can better estimate what a monthly mortgage payment would be.
Follow these three steps to set a budget.

1- Know your income and expenses—Add up your monthly expenses and deduct that amount from your net monthly income.

2- Set your priorities—If you need more room in your budget to save, it’s helpful to separate your expenses into “need to have” and “like to have” categories.

3- Track your spending—Keep track of where your money goes each month and balance your budget.

It’s not about the maximum amount you can borrow based on your income; it’s about what you can comfortably afford. For a starting point, take whatever you make each month, before taxes, and multiply that by 28%. That’s how much a manageable monthly payment might be for you, including taxes, insurance and PMI.

It’s not about the maximum amount you can borrow based on your income; it’s about what you can comfortably afford.

A good benchmark is to spend no more than 36% of your gross monthly income on your total debt, including your mortgage payment and other debt such as car payments and credit card payments. If you are paying more, you may want to consider lowering your mortgage payment.

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