When Trish and I were first thinking of buying a house we had no idea if we could afford it or not. I have to admit right here that Tricia is the one who manages the money and calculates our budget and spending and she does a pretty good job of making things work out for us.
As I was saying, we were nervous about whether we could afford a home and the mortgage payments but we desperately wanted to move out of the apartment we were in. Trish had been there for 16 years, and I’d been there with her for maybe 10 years. It was time to move and get on with our lives.
As we began looking for a home Trish kept track of all of our spending. If one of us stopped to buy a chocolate bar at the store on the way home from work the money spent on the candy was written down on a list of expenses. She had it all sorted out after two months and knew exactly how much we spent on the things we needed- like rent, food, gas for the car, and other travel expenses, as well as where we could make cuts in our spending such as not buy chocolate bars on the way home from work anymore and bringing lunches to work with us.
With the minor cuts she made, cutting out things we really didn’t need she managed to come up with an extra two or three hundred dollars a month for us. Good work eh?
At that point we figured that we could probably afford a mortgage on a home. That’s when we started going to banks to see if we’d qualify for a mortgage, and find out if we could get serious about hunting for a house.
Trish also used the internet to look up what kind of Mortgage Rates were available at the time, and I’m sure she used an online Mortgage Calculator to figure out how much we could realistically afford to spend on a mortgage each month and still live comfortably.
Mortgage calculators are great. There’s one at personalhomeloanmortages if you’d like to give it a try. Simply fill out the amount that your home will cost you, or maybe how much you expect to pay for your home, fill in a Mortgage Rate. It’s helpful to know what the average Mortgage rate is when you are doing this. As an example I’d fill in somewhere between 6 and 7 percent and then work your way down from there. You can also fill in the length of time that you’d expect to be paying your mortgage. Most mortgages are set for 25 to 30 years. Then just click on calculate and it will tell you what your approximate monthly payments would be for a house at that particular price and for the mortgage rate percentage that you listed.
Mortgage calculators are a great tool to use to help you figure out what you can afford to pay monthly for a home. You can always shop around for better interest rates once you’ve done some basic calculations, but at least after using a mortgage calculator you’ll have an approximate idea of how much you’ll need to pay monthly.