Are you ready to dive into the exciting world of homeownership? Before you start envisioning paint colors and furniture arrangements, let's talk about a crucial factor that often gets overlooked: your magic number for affordability.
Sure, your credit score plays a significant role in the home buying process, but there's another number that holds the key to your financial comfort: your magic number.
Financial experts have long emphasized the importance of keeping mortgage payments within 28% of your pre-tax income, especially if your debt load is minimal. However, in today's world where student loans, credit card balances, and other financial commitments are common, a shift in strategy is necessary.
Now, it's not just about the mortgage payment; it's about ensuring that your total debt payments don't exceed 36% of your pre-tax income.
Let's break it down with an example:
Imagine you're earning $5,000 per month. According to the 28% guideline, you could allocate up to $1,400 towards your mortgage if you have no other debts. However, if existing debts require $600 monthly, adhering to the 36% rule prompts you to adjust your mortgage budget to $1,200. This adjustment aims to cap your total debt payments at $1,800 or less.
This magic number ensures that you can enjoy comfortable living while owning your dream home. But what's your magic number?
Don't worry if you're unsure – that's where I come in. Drop me a message, and I can connect you with an excellent lender who can help fine-tune the specifics for your unique situation.
Remember, finding your magic number is the first step towards a stress-free home buying journey. Let's make sure you're set up for success from the start! Call me at +1 480-298-5551 for a free consultation.
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