How to Budget for Your Home Purchase
Financial pundits believe that your total monthly debt payments shouldn’t exceed 35% of your gross monthly income. If you are buying your first home, please keep in mind that you should not be paying more than 35% of your gross monthly income for your debts, including the monthly amortizations for your housing loan.
Of course, you may think that there was something overly conservative in the way your earnings were estimated vis-à-vis your loan potential. We did not intentionally factor in your salary increases over the years or the potential of other income sources in the computation of your annual pay. Why? We hope that (1) you will not feel over-confident that you can buy a bigger and more upscale house, and therefore a more expensive one, and then eventually find yourself over your head, unable to pay and reneging on your bank obligations; and (2) you can build that wiggle room for savings which you can earmark for education, for emergencies, for improving your home or for retirement. Having option no. 2 creates a pretty good feeling – and we speak from experience.
Buying your own house should create happy, pleasant memories over years of living there, not stressful experiences or sleepless nights, agonizing over your next monthly amortization.
Jacqueline G. De Pedro
Director for Sales & Operations | Co-Founder
Real Estate Broker License
PRC Reg Certificate AA019210
PRC License No. 0019560