|
When it comes time to purchase a home:
|
|
Most people who rent the home in
which they live could afford to buy a home with the right
planning.
|
|
|
In order to know about your home buying potential,
it will be useful for you to take a look at your income,
savings, monthly expenses, and debt. All of these are
important factors in how much mortgage you can afford
and also in how purchasing a home can affect your monthly
budget.
|
|
|
Together the following four categories are a guide
that will give you a better understanding of your financial
situation. Just print this page, and fill in the blanks
for each of the categories listed.
|
1) Review your income
Purchasing a home may require that you
have a certain amount in savings that can be applied
to your down
payment and closing
costs. If you don't have a
lot
of cash
available, there are loan programs available (especially
through FHA and VA mortgage programs) that do not require
much cash
payment at closing. Some questions to consider:
 |
On average, what is your monthly income?
|
|
Will your income remain stable in the near future?
|
|
Are you expecting any increase or decrease in income
in the near future?
|
|
Here is an example of some income categories to help you
estimate your monthly income. |
|
|
Borrower's Salary |
$
|
Co-Borrower's Salary |
$
|
Taxable Interest |
$
|
Investment Dividends |
$ |
Other Income |
$ |
Go to Top
2) Review your savings
A little savings can help a great
deal when planning to purchase a home. There are some
costs that
you cannot finance through your loan; you have to pay those
at closing, the day that you buy your home. Some questions
to consider:
|
What portion of your income are you saving?
|
|
Can you save more money than you are now?
|
|
Here is an example of some savings categories to help
you estimate your monthly savings.
|
|
|
|
Savings
Account
|
$
|
Checking Account
|
$
|
Retirement
Fund Contributions
|
$
|
Stocks, Mutual Fund Investments
|
$
|
Other Savings
|
$
|
Go to Top
3) Monthly expenses may increase
The purchase of your home
will likely change how much you will need to spend on expenses
every month. If you have trouble saving now, your finances
may be too tight with the purchase of a home. Some questions
to
ask yourself:
|
How will the purchase of a home affect my monthly budget
and my ability to save?
|
|
Can I support the additional expenses that the purchase
of a home will bring?
|
|
Do I expect to maintain a stable income for the foreseeable
future?
|
Here is an example of expense categories to help you estimate
your monthly expenses. This can be useful to determine your
current monthly expenses and to estimate
how these expenses will impact your budget.
|
|
|
Utilities
|
$
|
Car Expenses
|
$
|
Insurance
|
$
|
Medical Expenses
|
$
|
Clothing
|
$
|
|
|
Child Support |
|
Go to Top
4) Review your debt responsibilities
Consider how your debt
in relation to your income will influence a lender's decision
on your mortgage loan amount. Carefully consider how additional
debt from house payments, on top of your existing debt, will
restrict your lifestyle. Some questions to ask yourself:
|
How much debt can I afford to manage comfortably?
|
|
Will I be able to manage my debt responsibilities through
the life of my loan?
|
|
|
|
Credit
Card
|
$
|
Car Loans
|
$
|
School
Loans
|
$
|
Alimony
|
$
|
Child Support
|
$
|
|
|
|
Child Support
|
|
Go to Top
|
