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6 Steps Couples Should Take Before Buying a House – GOBankingRates

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Whether you’re single or married, you need to take several key steps before setting your down payment goal as you prepare to buy a house. Married couples may be able to afford more with two incomes, but they may also have extra complications if one spouse brings a lot of debt or a bad credit record to the marriage. They need to decide whether it’s better to apply for the mortgage together or if they’ll improve their chances by having the spouse with the better credit record and less debt apply alone.

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Before you start serious house hunting, you need to make some key decisions about how much house you can afford, how you can improve your mortgage application and how to reach your down payment goal.

Calculate How Much You Can Afford

Whether you’re married or single, the first step in your home search is to figure out how much you can afford. “One easy way to do this is to simply multiply your monthly gross income by 0.28,” said Jacob Channel, senior economic analyst at LendingTree. “As a general rule of thumb, you should aim to spend no more than 28% of your monthly income on housing costs so that you can be sure you have enough money left over for other necessary expenses.”

Married couples with two incomes may have more flexibility to make house payments with two incomes — you’ll still have some income coming in if one spouse loses his or her job.

If only one spouse works, you don’t have the backup of another spouse’s income — it’s even more important to build up an emergency fund so you can continue to pay the mortgage if your income stops or you have unexpected expenses. You may want to be more conservative and choose a smaller percentage of your income when determining the monthly payments you can afford. Also keep this in mind if one spouse plans to take time off from work when you have young kids, even if you’re both working now. Having a lower mortgage payment will give you more options.

You can do a more nuanced calculation with an affordability calculator like LendingTree’s tool, which can help you figure out how much home you can afford and also show how much you’ll end up spending based on a variety of factors, such as the size of your down payment, the interest rate you’re offered and the other kinds of …….


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