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Do you know how much you can comfortably afford on a house payment? Budgeting is the key versus making an educated guess. Budgeting is a concept that most people are familiar with, but not necessarily apply in their daily lives. Calculating a responsible budget for yourself and your family, even if you are not currently looking to purchase a home, will help in keeping you financially stable as well as aid in adjusting quickly to lifeâ??s unforeseen circumstances.As for home buying, it is imperative to fully realize your current expenses in order to determine what kind of monthly payment you can afford. Since there are many variables that can affect your monthly payment it is helpful to be aware of these potential expenses so that you can plan and adjust accordingly. Interest rates, property tax and homeowner's insurance are all expenses that vary depending on the size of the home and loan.
First, start by tracking all of your monthly income so that you know how much money you have available to you each month. Next, write down all of your monthly expenses, even the little things like eating out and/or entertainment. How much do you spend on food each month? How much do you spend on gas? What's your electric bill like? Itemize all of these things so that you can see how much money is coming in each month and where it's going(income versus expenses). If you are budgeting correctly, you should see that you are spending less than your total net income(the amount you have left over after taxes and deductions are taken out of your paycheck). Once you have your budget in place, it will be easier to see what kind of monthly payment you can comfortable afford and where you can make adjustments in your expenses, if needed. A good lender can take your budget and use it to help you determine an affordable monthly mortgage payment and then turn that number into a total loan amount. Once you've established this â??price pointâ? you are in a better position to begin looking at homes because now you will know approximately how much of a home you can afford. However, there are even more items to keep in mind. You may have established that a $1,200 monthly payment is what's affordable for you and that it translates into a $150,000 loan. If you find a home that falls inside that price point but is in, let's say a flood zone, that $1,200 monthly payment may quickly turn into a $1,400 payment due to insurance costs. These kinds of variables may mean the difference between qualifying and not qualifying for a loan. That is why it is imperative to budget 'smart' by having a financial plan in place before you even start looking for a home. On our website, www.rpfunding.com, we have provided some budget forms and we encourage you to take a look at them, fill them out and then give us a call at 321-397-4420. Remember, conscious consumers make smarter decisions.
First, start by tracking all of your monthly income so that you know how much money you have available to you each month. Next, write down all of your monthly expenses, even the little things like eating out and/or entertainment. How much do you spend on food each month? How much do you spend on gas? What's your electric bill like? Itemize all of these things so that you can see how much money is coming in each month and where it's going(income versus expenses). If you are budgeting correctly, you should see that you are spending less than your total net income(the amount you have left over after taxes and deductions are taken out of your paycheck). Once you have your budget in place, it will be easier to see what kind of monthly payment you can comfortable afford and where you can make adjustments in your expenses, if needed. A good lender can take your budget and use it to help you determine an affordable monthly mortgage payment and then turn that number into a total loan amount. Once you've established this â??price pointâ? you are in a better position to begin looking at homes because now you will know approximately how much of a home you can afford. However, there are even more items to keep in mind. You may have established that a $1,200 monthly payment is what's affordable for you and that it translates into a $150,000 loan. If you find a home that falls inside that price point but is in, let's say a flood zone, that $1,200 monthly payment may quickly turn into a $1,400 payment due to insurance costs. These kinds of variables may mean the difference between qualifying and not qualifying for a loan. That is why it is imperative to budget 'smart' by having a financial plan in place before you even start looking for a home. On our website, www.rpfunding.com, we have provided some budget forms and we encourage you to take a look at them, fill them out and then give us a call at 321-397-4420. Remember, conscious consumers make smarter decisions.