Archive for July, 2013

Can You Afford this House?

houseWhen it comes to buying your first home, that question is not nearly as straightforward as you might think.

There are many so-called “golden rules” that determine how much house you can afford, and these are what your bank uses to decide whether or not to grant you a mortgage. Here are the two most prevalent rules:

1. Your monthly housing costs (mortgage principal+interest+property taxes+insurance) should not exceed 28% of your gross monthly income.

2. Your debt-to-income ratio should not exceed 36% of your gross monthly income, meaning that your monthly housing costs plus any other payments on debt you may have should equal more than 36% of your income.

Continue reading “Can You Afford this House?” »

Advertisement