Many people who are interested in buying a house prioritize their search for a property instead of knowing the state of their finances and knowing how much mortgage they can afford. They end up pining for properties they will have difficulty buying or paying off. With a big mortgage on their shoulders, they have difficulty saving money or paying other debts.
How Much Can You Afford?
If you are planning to get a mortgage in Utah, you must first understand your financial situation and capability. Then, you can choose to get a lower mortgage to save up and settle other financial obligations. With a set budget, you can find a home that fits into your financial plan.
How Much Should You Get?
An expert suggests that you limit your mortgage payments to 25 percent of your income. With this, you should be able to afford any emergency housing costs that may come up through the years.
If you want to be more precise, you can first prepare a budget for all your expenses and savings. You can allocate enough funds to pay off a mortgage for at least six months. This emergency fund will be useful in case of unforeseen financial difficulty. You have to factor in your long-term savings goals as well.
You have to predict increased housing costs, too. Homeowners insurance, lawn care, HOA dues, and utilities can all increase after some time. You also have to update your property tax with the purchase price of your home.
How to Borrow More than You Can Afford
As you do all of the above, you slowly grasp an idea of how much mortgage you can afford. When you want to borrow more, however, you can update your budget and cut down on unnecessary costs. You can even bundle your mortgage with your auto insurance as you can sometimes reduce your monthly payments up to 20 percent.
Plan your mortgage and your home purchase carefully, and you can save yourself from multiple problems that hound many homeowners today. Talk to a reputable lender to learn more about your options.