Are you financially ready to own a home? Many lenders tout the idea that mortgage payments can wind up costing people less than renting.  Although it is true that in a good number of cases mortgage payments can indeed cost less than some rental payments it is imperative to remember that a mere mortgage payment is not the whole picture.  There are so many other costs associated with owning a home; there are property taxes to pay, homeowners insurance to keep current, and don’t forget that when something breaks in a house you own then it’s your responsibility.  Renters can merely call their landlord to get things fixed; homeowners need to dig into their own pockets. 

So when you are budgeting for your mortgage payment be sure to take into consideration the fact that your mortgage payment will be merely a portion of the monthly cost associated with owning a home.  You should be able to put money away every month for a repair fund, and you should also be able to pay for any additional insurance, such as flood insurance, without it causing a big trauma to your bank account.

If you’re looking at your potential budget and you notice that there will be very little money left over each month then you need to lower your expectations in a home.  You don’t want to stretch yourself too thin and you need to make sure you will have an abundance of cash left over each month, otherwise you are just asking for trouble to knock at your door.  It is hard to think in a practical way when you find a home, which you adore.  You might find yourself trying to finagle your budget to make it work. You might even talk yourself into believing that you can cut some corners or temporarily take on a second job.  You shouldn’t let your emotions rule you when you are figuring out what you can afford.  Now is the time to think in a practical manner so you don’t find yourself in a tight situation down the road.  Are you financially ready to own a home?

• Debt to income ratio
  When applying for any sort of loan you will probably hear the term debt to income ratio mentioned more than once.
  
  
• Additional costs to owning a home
  Many people are unaware of all the additional costs to owning a home that go above and beyond their planned monthly mortgage payments.