AUTHOR BIO
Mike Ballew is the founder of Eggstack®. He’s a member of the Financial Planning Association, an engineer, and software developer.
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ABOUT US
Mike Ballew – Financial Planning Association member, engineer, author, and founder at Eggstack.
Eggstack is an independent financial technology company located in Jacksonville, Florida. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.
PRIVACY POLICY
With decent credit, you can qualify for a mortgage equivalent to 28 percent of your gross income. Lending institutions typically look at your overall financial situation to make sure that your total debt is no more than 43 percent of your gross income. This is referred to as your debt-to-income ratio. The question is, if you can get a home mortgage with payments equal to 28 percent of your gross income, should you?
When it comes to the question of how much house to buy, you would be wise to avoid the advice of housing professionals. Real estate agents and mortgage providers work on commission. That means the more house you buy, the bigger their paycheck. Have you ever noticed when a real estate agent strays outside your price range, it’s always on the high side?
No one cares more about your financial wellbeing than you do. You have to look out for yourself. The best place to start is to establish a housing budget that you can live with. Be sure to include ancillary costs that come with homeownership such as property taxes, insurance, private mortgage insurance, homeowners association dues, utilities, and maintenance. Don’t be talked into buying more house than you can afford.
The average American spends 25 percent of their gross income on housing. Prospective buyers are told to buy as much house as they can. While owning a home is a good investment, there is more to life than homeownership. There are other things in your budget that are equally important. Like your vehicle, groceries, insurance, and retirement savings.
Do you like to have fun? Of course you do. That list didn't include anything fun. It’s important to relax and enjoy life. Your household budget should include items such as vacations, dining out, hobbies and other forms of entertainment. If you buy too much house, you won’t have anything left over for entertainment. You will have a big house and nothing else. Is that how you want to live your life? Make the wise choice and buy only as much house as you can afford.
Photo credit: Pixabay Eggstack News will never post an article influenced by an outside company or advertiser. Our mission is to help you overcome uncertainty about retirement planning and inspire confidence in your financial future.
Financial Planning Association member, engineer, author, and founder at Eggstack.
