Buying a home is not as simple as it was in past generations. Where postwar couples could partake in the American Dream making the mortgage payment their primary goal every month, today’s homebuyers tend to bring some additional debts and more complex financial portfolios to the table. Most buyers finance homes with mortgages these days, and interest rates fluctuate considerably more than they did in our parents’ generation.
Current thinking about home affordability at any given time concentrates more on the monthly costs of home ownership as they compare with income and debts than any other factor.
Income is not the only criterion. Equally important in today’s debt-driven society is the amount of your other obligations. Each lending institution and each loan program has its own guidelines. The same indebtedness considered excessive to one loan underwriter may be acceptable to another. Outstanding student loans, life insurance payments, and child support may affect your allowable mortgage payment—or they may not. |
