How Much House Can You Afford?
Buying a house commits you to a long-term relationship with a mortgage and requires a considerable amount of time and energy that most homeowner will tell you becomes second nature. American consumers spend from 21% to 54% of family income on their housing. How much each family spends on housing depends on many factors.
Three basic considerations that can help a family determine how much home they can afford are:
- The amount of take-home pay the family can reasonably expect.
- The family’s living costs and other debt payments.
- The total amount of housing expenses, including: taxes, insurance, energy, furnishings, maintenance, and mortgage payments.
Because of rising prices and increased housing-related expenses, the old rule-of-thumb on how much to pay for a home no longer applies. For the best advice on what type of loans are available and what to apply for, please contact us.