We all want to own a home. But before you turn your dreams into reality, you must take a careful, objective look at your finances. Ask yourself: Can I really afford a home?
Here is the reality. Very few first-time home buyers have the cash reserves to purchase a home outright. You will have to take on a long-term mortgage. This means that you are accepting debt that in most cases exceeds $100,000. Are you ready to take on that commitment?
Most experts agree that your mortgage payment should be no larger than one-third of your income. This will change depending on your existing debt (student loans, credit cards, car loans).
Take the time to examine your expenses. How much can you realistically afford to pay each month? Can you make cuts to your current expenses?
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