How Much Income To Buy A Home?
How much income to buy a home is perhaps the most asked and yet misunderstood topic in the world of Real Estate. Truth be told, it’s not your fault.
You see, there is a quite a bit of misinformation out there about the income required for a mortgage. Read on to cut through the clutter and learn the truth in Real Estate.
For the simple reason that you will then know the answer to the question of how much income to buy a home as it applies to you personally.
How Much House Can I Afford With My Salary?
Answer: it depends. Really it does. First of all, it does not take much imagination at all to understand that how much house you can afford depends first on where you want or need to live.
As is always the case in Real Estate, it comes down to Location, Location, Location. Naturally you will need a much heftier paycheck to foot the mortgage bill for a home in San Francisco, California than Pittsburgh, Pennsylvania.
Take a look at this nationwide chart that outlines how this plays out across the country.
How Much House Can I Afford With My Salary? Part 2
Of course, you understand that beside location, your salary, as in the size of that paycheck you bring in is a big factor. Bigger paycheck naturally means more home buying choices. Got it? Great, moving on.
How Much House Can I Afford With My Salary? Part 3
With all of the above being said, there is one Real Estate truism you will want to take the time to get comfortable with. Go back to the answer to our question of the day “how much income to buy a home” ,
You must keep in mind that Real Estate, at least in terms of pricing, sales and that sort of thing is NOT SET IN STONE.
In other words, how much house you can afford today may have little, if anything to do with how much house you can afford next year, when you retire, and so on.
Even if you are the type to stay put in the city or town where you currently live, the indisputable fact is that Real Estate Sales and Prices are a moving target.
Or to put it another way, over time, if you take a look at history, Real Estate and Homes for Sale prices move up, down and sideways. Not only that, sometimes Real Estate stays flat for a while.
But hold on,there’s more, one more piece to the home buying puzzle.
How Much House Can I Afford With My Salary? Part 4
In addition to everything mentioned above, there is yet another factor to consider. That factor is the interest rate on your home loan.
Did you see the recent news about cheaper mortgage rates ? Without question, lower rates mean either more home for you or less money out of your pocket each month for the mortgage payment.
As far as rentals?
Not so much. In fact not even close. Consider the Inconvenient Truth about Real Estate: more people than you might suppose are renting. This not so pleasant truth was exposed in a recent story on none other than the Huffington Post.[LINK]
Pay attention to the fact that just because more people seem to be renting either by choice or not, that does not mean that renting is the best choice. Understand that renting is not necessarily the most affordable housing choice.
Sure, rentals are relatively easy to get into perhaps, But more often than not, you will find that your monthly rent payment will never go down. At least not for the foreseeable future. According to HSH, a mortgage service form, monthly rent payments are increasing much faster than wages. Ooops, that’s not so good.
Worse still, quite a number of Real Estate industry pundits are quick to point out that far too many renters are spending more on housing than they can reasonably afford. Uh oh, where do suppose that will end up?
Yet, all of the above being said, it is important to remember that you will need to live somewhere. If you have the option to buy your own home, why would you want to keep shoveling your hard earned money into the landlord’s pocket?
Can you understand why getting clear on how much income to buy a home really is ?
Beware The Rental Trap!
Is there a way out of the rent and pay more every year trap? Certainly! There are a number of first time home buyer ]programs out there.
Start by taking a look at the how much income to buy a home
calculator below Disclaimer: be careful that you don’t get carried away with that how much house can I qualify for calculator.
As the saying goes, your results may vary.
The only way to really know for sure is to sign up for a FREE NO COST NO OBLIGATION BUYER CONSULTATION BELOW.