Ok, so, you got a job, it pays well, and you're sick of living in an apartment. You think to yourself how nice it would be nice to get your very own cozy dream house. These nice and wonderful idea you can plan along by yourself, with a partner, for the whole family has some financial consequences to it.
Experts say that when considering to buy a house, you also have to make sure that you home and loan expenses should be higher than 35% of you monthly income. Well, of course you still have got to eat and do other recreational stuff.
So here are some things you might want to do to see if you really can afford being a home owner financially:
First check on your monthly income and calculate them after tax. Include your spouse's paycheck and retirement, SSS and other alimonies that you can use towards the mortgage payment of your future house.
Then, list all your recurring monthly income, include the utility bills, car, credit card payments and children's school tuition fees. Calculate other loans that you may have. Do not include the rent you pay. You are trying to determine how much you can afford to pay for a house.
Then calculate all other miscellaneous fees that you have in your life, include the clothing your wear, expenses for eating out, or if you need to spend for your hobbies. Factor in also your family's wants and recreational expense activities if you are married with kids. Also try to determine which ones you can do without and decide if the extra money for golf fees can go to your mortgage fees instead.
The after expense of all of the above is how much you can afford to pay for your house! It would also be wise to calculate and set aside money for other house fixtures like leaking faucets and ceiling, because that one comes out of pocket.
Now that you now, then you can decide. The last thing that you would want to happen is home foreclosure or worse, a bankruptcy if you are unable to pay.