Buying a home is a big undertaking and financial commitment.

While buying a new home is exciting, it should also provide you with a sense of stability and financial security. You don’t want to find yourself living month to month with barely enough income to meet all your obligations: mortgage payments, utilities, groceries, debt payments’ you name it.

In order to avoid the scenario of buying a house you truly can’t afford, you’ll need to figure out a housing budget that makes sense for you.

What Home Can I Buy With My Income?

Two major parameters help you figure out how much house you can afford.

The first is the 50% debt-to-income rule: Your total debt payments, including your mortgage payment, should never be more than 50% of your income.

The second is your down payment and cash reserves: You should aim for a 20% down payment and always try to keep at least three months’ worth of payments in the bank in case of an emergency.

The bottom line for home buyers is, don’t overstretch yourself. Maybe you could buy that dream home; but might as well have drained your savings account and squeezed every last penny out of your monthly budget. However, if your finances change, that dream could turn into a nightmare.

It makes more sense to leave a bit of breathing room in your budget. That way, if food or fuel prices go up, it won’t stretch your budget to the breaking point.

Finding the right home, takes time. But it’s worth holding out for a home that fits both you and your budget. A home you can afford is a home you can truly live happily ever after with.

You can get the best deal on your mortgage and investment by planning ahead. For example, pay down any other debt and get into a better financial shape.

In addition, know exactly what you’re getting yourself into. Unless you’re willing and able to hold the property for several years, you might end up losing money on it if you have to sell it soon after buying. The best route is to look into your circumstances and see where home ownership fits before you jump into it.

Talk to our advisors to find banks and mortgage options that could save over the life of your loan as well as get access to verified properties that best suits you.

Start with a free Mortgage pre-quote from Homely Yours and check today’s rates on our Website [updated in real-time]