![]() ![]() Your pretax income tends to be more stable and measurable, since not everyone knows what deductions and taxes they’ll pay at year’s end. ![]() Your gross income is also what mortgage companies will use when they calculate how much money they’re willing to lend you. It’s that high-level number you think of when you say, “I make this much per year.” People know their pre-tax salary off the top of their head. Your pre-tax income, also called your “gross income,” is the amount of money you make before deducting for state and federal taxes. You should be familiar with two different numbers: 1. To calculate your home shopping budget, you’ll need to start with your income. ![]() Source: (Lukas/ Pexels) Step 1: Tally up those paychecks: How much money comes into your house every month? Pick up your pocketbook- let’s make a plan. Ready to crunch the numbers now? HomeLight’s created a Simple Home Affordability Calculator to help you safely budget and to answer the critical question: How much house can I afford? in a way that won’t lead to a grocery cart full of ramen down the road.īut if the thought of juggling mortgage payments, HOA fees, and maintenance costs (on top of everything else you have to pay for) makes your head spin, you’ll need a little more help. From here you’ll be able to create a budget based on smart money management and what professionals across the real estate and finance industries recommend. This guide will take into account all the variables, from mortgage basics to those tricky extra costs like taxes, insurance, and maintenance. In fact, 63% of millennial buyers have regrets about buying a home because they underestimated just how much it costs. The truth is that houses are expensive, long after the closing celebrations fade. Buying a house just feels like the natural next step in your life… and that’s an exciting place to be.īefore you set out to find the perfect abode where you’ll one day pop champagne in an empty kitchen, you’ll need to take a hard look at your finances and get familiar with what it means to be a homeowner. Your bank account looks solid and you’ve been on stable financial footing for awhile now. You’re ready to put down roots, build up some equity, and find a place called home. ![]()
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