The very last number being quoted as to the big question: What mortgage payment can you afford, now seems to be 31 to 33% of your income. But what income should you base it on really? After taxes? After your credit card payments and car loans, provided they are manageable? After your regular expenses? Or after all three? There are no hard and fast rules for this, but there are plenty of calculators available that will give you a pretty good idea what you have to pay on 15 to 30-year loans at different interest rates. Of course there’s the insurance and the taxes.
Reportedly, many experts in the field expect housing prices to keep falling for a while longer, while others say now is a good time to buy. If you’re not in a hurry and you see the trend continuing, waiting a little longer may be advantageous, since the trend can be your financial friend. Check the papers and watch for home prices in more affluent areas to decline; these will be the last ones to go down since their owners are less likely to face foreclosures and are not forced to sell. However, when they do, the more modestly priced homes would be selling at a brisker pace already and their prices would creep up.
If there’s a house you really want, it also depends on how much of a down payment you can make before you calculate what you’re in for each month. If it is not a new home, you will need to budget for some things that will need to be changed. Remember that you have to add about 10% of the cost of the house to run it, because you will now be faced with water bills beside the regular utilities and also with the general upkeep of the property. And if you’re married and one of you would be unemployed for a time, would you still be able to make that monthly mortgage payment without cutting into your food or clothes budget. The smart thing is to only buy what you can comfortably pay for and to trade up when the economy revives.
We’ve all known house-poor people. They don’t have any more than the necessities in their home and any unexpected expense will cause them to get into credit card debt. So the question of what mortgage payment can you afford needs an answer tailored to your circumstances. This means that you should write down every expense you already have and then add a small percentage to the total in case there are more economic surprises. Doing the math ahead of time will arm you against the super-enthusiastic real estate agent who may have a different opinion of what you can afford and it will make your visit with the loan agent a lot easier.
If you want a home in the near future but need to get out of debt first, it would be smart to talk to Fast Track and see how this can be accomplished. Fast Track’s debt settlement program has professional negotiators working with your creditors. Debts are negotiated in an orderly manner as agreements are reached with your creditors subject to your approval. The program takes about 12-36 months and is completed when all debts in the program have been settled. The Fast Track program provides ethical and dedicated service to help achieve your goals.
When we start your plan we establish an affordable monthly payment which is deposited in a settlement account in your name. Once you have the required funds in your settlement account, we will contact your creditors and make settlement offers. We will continue to work with them until all debts in the plan have been settled. Fast Track’s goal is to settle all debts in the plan for 40%-60% of what you owe.
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