Ask:
So we are planning to sell our house soon. One of the few good things that came from hurricane katrina is the Baton ROuge housing market is BOOMING. So we have a enough equity to pay all credit cards, debts, etc, and still have a great downpayment form something else. Here is my concern: All the ratios I've read say your mortgage should be no more than 25%- 35% of your salary. Is that take home or before taxes? Also. I want to hear REAL LIFE stories as to how all this worked out for you! We have three kiddos and all the expences that go with that like ballet lessons, piano, etc. We DO NOT want to be house POOR!
I feel like that didn't make sense. So ask any questions that will help you answer mine! Thanks so much!
Answer:
What we did is have a figure of the most you want to pay for mortgage payment. If you plan to include escrow (taxes and insurance) make sure you get estimates for those too. Then go to your mortgage broker (or whoever you are financing through) and tell them that you want to have a payment no higher than x amount. They can tell you a price range and I would want to stay under that price. (did that make any sense?)
Answer:
We sat down and did a detailed monthly budget including all utilities, gas, groceries, retirement funds, contributions to savings, entertainment, insurance, etc. We included EVERYTHING and when we got the amount leftover we just decided what we would feel comfortable with and still be able to have some left over for unexpected expenses.
That will be your guideline. The most important thing is NOT to let the lender or Realtor try to tell you what you can afford or what price range you should be looking for. YOU decide what you are comfortable with and stick to it.
Good luck!
Answer:
Analyse your income and spending habits first. Determine what you could comfortably spend on mortgage, and try to make it based on only having one income if possible.
Also determine the smallest square footage you could afford or need. Maybe you don't need as big of house as you have now?