A mortgage payment typically is one of the biggest payments that a person is responsible for. This financial responsibility might impact a person's budget significantly for several years to come. There are mortgage calculators online that can be used to estimate an affordable mortgage payment. However, it is important to start with a basic budget to determine more accurately how much mortgage payment is truly affordable before applying for a new mortgage.
List Income From All Sources
First, list all sources of income that is received regularly. This includes regular paychecks from both spouses, dividends, and annuities. Most budgets are prepared on a monthly basis, so ensure that the total amount of take-home for a typical month is included in the budget.
List Recurring Expenses
Create a list of all expenses for the month - this should include utilities, minimum credit card payments, car loans, monthly food and gas expenses and more. Ideally, it will include an allotment for savings, home maintenance and other expenses. The more accurate the list of expenses is for the budget, the easier it will be to estimate affordable mortgage payments.
Think About Irregular Income and Expenses
In addition, it is important to think about irregular sources of income and irregular expenses. This may include seasonal income from a part-time or temporary job that is expected to continue into the future as well as quarterly payments for homeowners' insurance or annual property insurance premiums. While these are not monthly income sources or expenses, they should still be accounted for.
It's best to set up a monthly mortgage payment that is affordable for a family's and individual's budget, and these steps provide basic guidance for establishing a budget. Call us and we can recommend mortgage representatives that will help you.