Planning to purchase a home in 2015? Continued low mortgage rates can help stretch you home buying dollars! But how much home can you afford? The best way to know that is to visit a reputable lender.
But even before that first visit with a lender, it’s always a good idea to take some time to examine your finances on your own. Here are three areas that you — and your home buying partner if there is one — should take a look at:
- Your income. Take a look at your after-tax income. After taxes and all the deductions from your paycheck, how much money do you have each month to pay your bills and make discretionary purchases?
- Your spending habits. Too often, people tend to fudge a bit when looking at how much they really spend. That’s why it’s always a good idea to track all of your purchases for one month. Don’t leave something off and justify it by saying, “Oh I’ll cut back on that next month, so I don’t have to count it.”
- Areas you can cut back. Depending on your income and expenses, you may have to make some adjustments before you can buy a home. If you know exactly where your money is going, you can easily identify areas in which you can cut back. For example, were you surprised by the amount you spend on restaurant meals and trips to Starbucks in one month?
We love helping people buy homes! Whether you want to purchase a home right away or your home-buying goals are a bit more long term, visiting with us is a great way to get moving in the right direction!