Los Montesinos Property for Sale
Things to do if you want to know if you can afford to buy a home
One of the most common doubts that arise when we look at a home for sale is to know if we can afford it.
Many voices have blown our ears that it is better to buy than to rent, that renting a house we are throwing the money. However, during the economic crisis a lot of defaults came to the surface because many homebuyers bought above their means.
However, the current situation has changed. Now there is a real estate market with much more reasonable prices, and with some banks that now lend money to much more advantageous conditions. If your dilemma is to buy or not to buy, in this article we help you to calculate if you can pay your home. Because that's the main thing. Then whatever you decide is up to you.
What are your annual gross income? Well, if you know ... multiply it by four.
Investment in a home should not exceed the annual gross income of a person (or a family) corresponding to four years. That is, if you multiply your gross annual income by four, you will get the maximum price that you should pay for your home.
Do not borrow money for more than 33% of your income.
Another formulas commonly used in the financial system is the so-called "30% Rule". Under this unwritten rule, the total indebtedness of a person (or a family) should not exceed 33% of their income. That is, the mortgage fee must be at most 30-33% of your salary / income.
However, in this case, the concept of indebtedness does not refer exclusively to the mortgage rate, but also to the other monthly receipts that we may have for other loans and credits. That is, all of our loans must account for at most 30-33% of our income.
Try to add savings for 20% of the cost of the property.
Experts advise saving at least 20% of the price of the home as a guarantee to know if we can afford it. If you have savings and can pay cash up to 20% of the price of the house, experts calculate that you can cope with the investment, as long as you also comply with the first two requirements of this article.
