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How Much Home Can You Afford? Calculating An Affordable Mortgage

Jan 9, 2008
One of the most exciting steps that you can take in life is making the purchase of a new home. If you have started on that journey, one of the most important considerations that you need to bear well in mind is how much you can afford to pay for your new home, how much of a mortgage you can afford to take on. There are some factors that you need to keep in mind when it comes to determining how much home you actually can afford to purchase at this point in your life. Tampa Realtors or lenders will tell you that you must pay close attention to these considerations in order to make the best decisions in regard to the amount of money you spend on a home.

You need to understand that the Tampa real estate market is filled with stories of people who have ended up overspending on their homes. Indeed, Tampa foreclosures reached record numbers in the past year. This is a trend that has been repeated time and again across the country as well. Because of all of this, it is important that you be especially prudent in making a decision regarding how much you are capable of investing in a home.

Obviously, the first factor that you need to take into consideration is the amount of reliable income that you have coming into your household on a monthly basis. You must be conservative in this regard. You cannot be overly optimistic and make assumptions about future income. Rather, you must closely consider the income that you know you will be earning.

There is an often used rule of thumb that you should not spend any more than 25% of your net income on housing expenses, on the costs associated with a home mortgage. However, in this day and age, that is only part of the picture.

In determining how much you wisely can spend on a home, you need to closely consider your other debt and obligations. You need to understand that your other debts have a specific and a direct impact on the amount of money that you will have available to invest in a home mortgage.

If you have a growing family, you also need to be aware of whether or not you will be adding new additions to your family in the future. You need to appreciate that every additional mouth you have to feed will add to your financial obligations in a significant manner. Therefore, if you do intend to grow your family, you must make certain that you take this into account when you are looking around the Tampa real estate market for the most ideal home.

By paying attention to these tips and factors, you will be in the best possible position to make a financially wise decision in regard to the purchase of a new home and in regard to the amount of money that you are willing to invest in that residence.
About the Author
Lance Mohr is your Tampa real estate expert, with over 10 years of experience and 15 years of investing. Please visit our Tampa Realtors website and add our Tampa real estate blog to your favorites section of your browser.
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