Buying a House and Getting a Mortgage You Actually Can Afford

The national news is filled with stories of people who are entering or nearing foreclosure as a result of turmoil in the subprime mortgage market. Homeowners around the country are having problems meeting their monthly obligations as their budgets have been stretched too thinly by the increased cost of energy and rising interest rates. While there was a real problem with lenders pushing products and purchases that individuals could not afford, the simple fact is that many people simply bought more house than they could afford. If you could afford an interest only payment you probably should not have bought the house. Too many people have simply bought into the idea that we deserve to have big houses and nice cars but the truth is that we deserve only what out paychecks can afford. The lives we see depicted on TV are not real and the for sale signs popping up in yards across the country should bring this reality home.

The most important step in buying a home is to determine how much you can afford to pay. While many experts offer different guidelines, the conservative two or three times your annual income is a good place to start. For many people in many markets this indicates that they cannot afford to buy as the home prices in many areas are simply beyond the means of average people. This is a sad truth but it is better to know it before you buy and not find it out after you buy. People will tell you that you can go four times your annual income or higher, but you will note that these people are usually trying to sell you something.