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Welcome to the NerdWallet SmartMoney podcast, the place we reply your questions on actual cash – in 15 minutes or much less.
This week's query comes from Steve in Denver. He asks, "I'm trying to purchase a home subsequent yr, however I have no idea what I can afford. How can I learn the way a lot home I can afford? »
Know your housing funds. When figuring out how a lot home you’ll be able to afford be certain that all debt funds – together with a mortgage – don’t account for greater than 36% of your revenue earlier than tax.
You cannot pay a deposit of 20%? You don’t want it. Though you needed to pay mortgage mortgage insurance coverage in return, you will get away with placing as little as three% down.
Even in case you have cash, ask in case you are emotionally able to entry the property. Having a house will be rewarding, however it's a variety of work. If you don’t want to maintain the upkeep or if you don’t suppose to remain not less than three years at dwelling, you may be higher to hire .
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