If you are looking to get a house you probably are wondering how to work out how much mortgage you can get to finance this purchase. This is a common question for home buyers but the calculations are quite simple when you break it down into the specific steps. In this article we at iHaveDiscovered are going to tackle this particular issue head on.
The first step in How To Work Out How Much Mortgage You Can Get is to determine how much money comes into your household. How can you possibly figure out how much you can afford til you determine how much you have? Most of this money will probably come in the form of a salary or paycheck, but you may also have some investments of inheritance as well. Just tally up all these resources and determine how much actually comes into your house every month.
Now that you know how much money is coming into your house, the next step in determining how to work out how much mortgage you can get is to determine how much is going out. There are certain expenses that are more or less fixed…such as a car payment or lights or electricity. Of course if you sell your car and cut back on how much energy you use this is somewhat variable, but for the purpose of this discussion let’s assume that they are fixed. Other expenses, like groceries and entertainment are relatively fixed as well, but you could cut back on stuff like the amount of ice cream and chocolate your buy and how often you go out to the movies. Tally up all these expenses (less the amount you are currently paying for rent mind you) to determine how much money is flowing out of your house each month.
Now, what about investments? It is true that your home is a very valuable investment, but it is not good to put all your eggs in one basket. You need to have some cash set aside and some money in stocks and bonds and a 401K as well. Figure out what you feel is a comfortable amount to invest every month.
So, armed with the equation: money coming in – expenses – investments = the amount of leftover money you can invest in a house. This amount of money will help you to determine how much of a mortgage you can get as this is what you will need to be paying off once you get your house.
In Conclusion: How To Work Out How Much Mortgage You Can Get
So, we hope you enjoyed this article and found it informative. Now you know how to work out how much mortgage you can get to finance that home of your dreams.