First Time Home Buyer: Buying a Home Within Your Comfort Zone
When buying a home in Phoenix area, it is important to know that how much you can afford. Once you figure it out, then you want to know how much monthly payment that you are comfortable paying without scarifying your lifestyle. Read on how to find your comfort zone with your mortgage payment every month.
What makes up a monthly mortgage payment?
A monthly payment isn’t just the principal and interest payment on your loan, but also taxes, insurance and, depending on your down payment amount, private mortgage insurance (PMI).
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What’s a comfortable monthly mortgage payment?
Before you fall in love with a home, and even before you start looking at homes, take the time to put together a budget. Even if you’ve been prequalified for a mortgage loan amount, check to make sure what mortgage payment will fit within your lifestyle without putting any other financial plans on hold.
28% Mortgage payment ratio
It is not about the maximum amount you can borrow based on your income. It is about what you can comfortably afford. For a starting point, take whatever you make each month, before taxes, and multiply that by 28%. That’s how much a manageable monthly payment might be for you, including taxes, insurance and PMI.
36% Debt-to-income ratio
A good benchmark is to spend no more than 36% of your gross monthly income on your total debt, including your mortgage payment and other debt such as car payments and credit card payments. If you are paying more, you may want to consider lowering your mortgage payment.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
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