Why One Should Ask this Question "How Much Home Can I afford"?
Many people have learned it the hard way
Many people have learned it the hard way. In this tough economic time a person should be very careful in buying a home. If a person is planning to buy a home then the first question he should ask to himself is "how much home can I afford". He should know how much he can put down as down payment and how EMI he can afford.
In case if you are in job you should calculate your monthly income, your expenses and then you should finally calculate how much you can pay as EMI. Remember you should save something for rainy day too. And In case if you are in business you should know you annual turnover and how much profit you can make. And don't forget to have some reserve for business and your expenses.
Once you have completed forming your monthly and annual income the next thing you should analyze is your expenses. Never plan things based on your monthly income. One should plan things on the basis of income left after all expenses because that is the only income your afford to pay on your home EMI. Therefore, a person should write down their monthly expense to know how much home they can afford.
After compiling your total expense for two months, you should add them and dive it by 2. When you do this you get an average monthly expense and this is your average expense. Now you should analyze your income and expense then set aside 10% of your remaining income as savings and remaining amount is what one can afford on the EMI of a home.
Recent financial has taught many people the hard fact of planning things, the hard fact of saving for the rainy day. The debt pile the world kept on building for the last 30 years is falling down now. Therefore, at this point when a person is planning to buy a home he should ask himself "how much home can I afford"
Why One Should Ask this Question "How Much Home Can I afford"?