The ABC’s of Home Buying
Before you buy a home or obtain a new home loan, it’s a good idea to take a hard look at your budget to determine what you can afford. A simple but immediate way to save hundreds instantly is to manage your money better and create a budget by following the ABC’s:
A. Analyze your current income and expenses to determine how much disposable income you have. You should always use your net income.
B. Develop a budget that will allow you to minimize expenses and maximize your disposable income. Be as granular as possible, and include both your current financial picture and your future financial picture and upcoming expenses.
C. Cut out any wasteful and unnecessary expenses by reducing or removing. Now is the time to purge those online subscriptions you haven’t used in 9 months.
Working through the ABC process will help you determine what mortgage payment you can truly afford. When determining what mortgage payment you can afford, also take into account your long-term financial goals.