What can I afford as a housing payment?


Hey, guys, it’s Eric with Low VA Rates
don’t forget before you do anything else look over here and subscribe where that
that little red button says subscribe we want you to know when these videos are
going live today we’re going to talk about how much of a housing payment you
can afford and what what’s most important is that you don’t try to buy
more home then you’re gonna be comfortable with. We do not want anybody
stretching themselves for overextending. Step number one you’re going to want to
come and figure out all of your income and we refer to this as gross income
okay so that is before taxes before medicare/medicaid whatever you’re
getting taken out of your paycheck gross income is like the amount that you wish
you got before everybody else took their part and remember if you have more than
one job there’s normally your primary employment which for me for example is
mortgages but if you have any secondary employment also start adding all that up
so for example let’s just say you make $4,000 at your main job of course
everything else comes out of that and then you may have another $500 and
secondary income your gross income would be $4,500 so that’s step number
one. Alright step number two after you’ve
figured out all your income now you got to do the not-so-fun part and that is
expenses you’ve got to figure out what all your expenses are okay what are some
common expenses you’ve got utilities you’ve got those two or three credit
card payments you might have an auto loan anything that you take the money
you make it work and put it somewhere else those are expenses so you’ve got a
whole list of income it’s pretty short and then unfortunately there’s usually
this long list of expenses that’s what you’re going to do next. So once you have
your income and all your expenses the next thing you’re gonna want to do is
work with a lender I would suggest Low VA Rates but at least some of it knows what
they’re doing and you’re gonna want to figure out all of the loan related or
you know the finance related expenses for example you’ve got I’m gonna put
this down here lender expenses or housing expenses right that are
associated with the loan there’s the down payment gotta have enough money for
that down payment there are going to be taxes and insurance that comes out of
your mortgage payment there is an interest rate involved you
just want to make sure you’re dealing with someone that knows all the expenses
that you’re gonna be held accountable to we’re gonna talk in another video about
debt to income ratio and residual income but I want you to remember the 28:36
rule okay now this is getting a little I don’t want to say fancy but a little
deep here experts suggest that you do not use more than 28% of your income on
housing related expenses that would be just the mortgage your principal your
interest your taxes your insurance do not use more than 28% on will put
housing related expenses and then you take the 36 you take you should not
spend more than 36% of your gross monthly income on all other expenses
including housing so you put housing and other okay so that would be all these
debts we’ve talked about you don’t want to spend more than 36% on housing plus
other that’s the simple 2836 rule that will keep you comfortable and not
stretching your you know your home you’re not gonna get into a home more
than you can afford if you focus on this rule okay so in closing we tried to keep
this simple ultimately what we’re trying to get at here is don’t as I’ve already
stated buy more home than you can afford some people may say well hey I’m
comfortable with this I want a bigger more beautiful home and look that’s
natural when you’re out home buying that’s something that you’re gonna be I
guess tempted to do and ultimately it’s your call there are situations where you
can go over the 28:36 rule like I said we’ll get into that in another video
here at low B rates though we want you to borrow money responsibly and we want
you to be comfortable get into your home first and then you can always upgrade
and do stuff like that later which will also talk about hey I hope you’re
wearing red thanks for watching go out and buy that house that you can afford

4 Comments

  • Love your video

  • Another Great Video!!!!!!!!!!!!!!!!

  • Still renting looking to buy hopefully soon

  • Why can’t I get any help from you guys?

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