Buying a Home – How Much Can You Afford?

How much of a mortgage payment can we afford should be the first question which confronts the prospective homeowner.

It is generally agreed that a family may safely spend an amount for its home which is as much as double its annual gross income – but that they should not spend more than two-and-a-half times that income. In other words, a family earning $60,000 a year could reasonably buy a $120,000 house and, if it found one that was irresistible, might justify spending $150,000. No more. Unfortunately, many people have not followed these guidelines.

Should you buy a newly-built home or an old one? Some people prefer the newly-built home. It seems more more like one’s own if no one else has lived there. Also, new homes are less expensive to maintain, less likely to need repair, and more likely to have the modern conveniences such as a well-equipped kitchen, wired for cable and built more energy efficient, etc.

On the other hand, older homes are usually less expensive, and many people find their roominess attractive – particularly people with large families. Lawns and landscaping are developed – and these things can be expensive additional costs in a new home.

Old or new, keep this in mind: if the home you buy does not really suit your needs and will call for a lot of remodeling, find out in advance how much that is going to cost. Buying an old or run-down house and remodeling it, can be quite expensive. Get bids on the work before you buy.

Your family can make many of the decisions about home-buying on your own, if you take your time about looking and talk the matter over with each other thoroughly before you take final action. Is it large enough? Can you imagine yourself living there? entertaining there? raising a family there? bringing the boss home to dinner there?

Many other things about a house, beyond its looks and the feeling it gives you, should be explored before you finally buy. Get the advice of an expert, if necessary, to help you judge such factors as plumbing, heating, electrical wiring, sewage facilities, drainage of lot, etc.

Remember that the house you buy probably will be yours for a long time to come. You will be paying for it for a long time – 20 to 30 years. The better your choice, the lighter the burden of payments will seem.