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Step 1 - Determine your budget. |
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The first step towards home ownership involves a little introspection. You need to take a long, hard look at yourself and your finances and determine what you are planning in the years ahead and how much you can afford to repay.
Know your expenses and income.
Begin with your total monthly income. Add the after-tax income of you and your spouse (if applicable), regular income from assets which you will own after you buy a home, and any other income. This is your total monthly income. The next step is to determine your monthly expenditure. Don't include your current rent if you are purchasing a home to live in.
Subtract your total monthly expenses from your total monthly income and the number that you have is roughly what you can afford to repay each month on a loan.
You also need to consider where your career is headed and whether any salary increases are likely. There are also family considerations. Are you or your spouse likely to need time off work to raise a child, which could eat deeply into your income?
