The house you want to buy is most likely the biggest financial responsibility you’ll ever have. Depending on how you approach it, you can either make it easier or more difficult on your finances. This is especially true today, wherein the decrease in inventory resulted in prices going up in many cities all over the country, including Tempe, Arizona.
As such, you need to stay on top of your game and ensure that your finances can accommodate such a huge purchase before you sign that sale contract. In addition to working only with a highly qualified and experienced mortgage broker in Tempe, another key step to making the home buying process smoother is to first determine how much you can truly afford.
Determining the amount your finances can accommodate
Before you start shopping around for a house, you need to establish a price range of what you can afford. This means proper planning and not allowing your imagination to run amok and take over your good sense. It is easy to fall into the temptation of buying something simply because you want a house that can compare with your friends, but it isn’t as easy to repay what you cannot afford in the first place.
The most critical factors to consider in the equation
Of course, the first thing you have to factor in is how much your monthly mortgage payments will amount to. You shouldn’t forget the essentials as well, specifically those that you need to spend on a monthly basis. These include groceries, tuition fee, transportation, and utilities. Also list other miscellaneous expenditures, such as any club or gym memberships.
All in all, financial experts advise borrowers to follow the general rule of buying a house that won’t consume more than 30% of their income. This way, you have lower risks of finding yourself having difficulties in repaying your mortgage.