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If you don't want to be "house poor" how do you figure out what your monthly mortgage should be

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September 23 2012 - Schuylkill Southwest
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Assuming you have been able to save funds for a down payment, review all of your actual expenses for the past 12 months and subtract from you net income during that period to arrive at a monthly net positive income amount. That should be indicative of your current lifestyle/living expenses.  Determine the sales price/mortgage amount of a property you would likely buy and the monthly total mortgage payment. Add an appropriate amount for the increase of utility cost, and $125 monthly repairs/maintenance cost (if property is covered by Home Warranty) Subtract that amount monthly from monthly net positive income, and that will give you an the amount you have left over as a homeowner. If is negative (consider any likely change in continuation/increase/decrease of income(s) ) you will not only be house poor but first blip in your economy could put you in jeopardy of serious financial difficulty. Too many consumers don't take the time to determine their ability to afford home ownership, and with a shift in the economy millions have loss their homes.
 Lenders pre qualify but only you know what you can afford.
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September 23 2012
@ Rita,

The only person that can answer that question is the one that is asking it.  The Op's lifestyle and financial goals will determine the answer.  Socal nailed it, with the exception of chucking out the planning.  That may be what happens but will not help one avoid being house poor.
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September 23 2012
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You first determine what your personal goals are, both financial and otherwise - and then determine where home ownership fits into that plan.

You then sit down and map out a financial plan, which may or may not include home ownership. If it does include home ownership, build in a plan for building up a down payment, and also for establishing a comfortable level for mortgage payments and house maintenance.

Lastly, when you get frustrated because you want it all now, chuck all the planning out the window and let a REA show you how you can buy "the house of your dreams" for almost-nothing-down.
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September 23 2012
 That is a question for your accountant and your loan officer.
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September 23 2012
 
Related Questions
If you don't want to be "house poor" how do you figure out what your monthly mortgage should be
Profile picture for wayne lancaster
Latest answer by wayne lancaster
September 23 2012 | 4 answers
  • Asked by user3502856
  • In Mortgage
  • September 23 2012
Mortgage Rates
 
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