Shopping for a mortgage, you might encounter lenders who pre-qualify you for a higher loan amount than you expected. Many lenders work with standard debt-to-income ratio calculations which don’t take into account other costs of home ownership. If you take the highest loan amount, you risk maxing out your available funds and becoming “house poor,” without liquidity. Here are four steps to follow when deciding how much you should spend on a house.
Step 1: Understand what percentage of your income should go toward your mortgage
Take a good look at your monthly income and expenses. This will help you …
