Thinking about getting a mortgage? How much should you budget for your monthly payment?
- Housing costs vary from city to city and neighborhood to neighborhood, so using your current rent combined with the amount you're saving for a down payment and your renter's insurance is probably a good guide for how much you'll be able to afford for a mortgage payment and homeowner's insurance.
- Spending too much on your housing is a rough hole to dig out of, but it's much easier when you're owning rather than renting. A recent Harvard study reported that nearly half of renters are "cost burdened" because their rent exceeded 30% of their income, while one in four renters pay more than half of their income for rent. With a mortgage, you gain flexibility by developing equity, but it's still wise to avoid spending one-third or more of your income on your housing costs.
- If you choose an affordable place now, you can save money for a down payment on a bigger place down the road.
Talk to one of our mortgage experts today by calling 850.505.3200 ext 8360. Visit penair.org/mortgage to access easy to use calculators as well as apply online.