Are You Ready To Buy?

If you rent the home you live in, the right planning could enable you to buy a home.

To discover your homebuying potential, calculate your:

• Income,
• Savings,
• Monthly expenses, and
• Debt.

These factors determine how big a loan you can afford and how buying a home will affect your monthly budget.

Use the worksheets below to calculate your finances. Print these pages, and fill in the blanks. When you are done you will have a total for each of the four categories listed above. Later you can use these numbers in the Affordability Calculator to determine how much house you can afford.

Income

Review all of your sources of income. You will need money for a down payment and for closing costs. The FHA and VA have mortgage programs that require smaller down payments. Closing costs may sometimes be rolled into the mortgage.

Answering these questions may also help you to estimate your financial position.

• What is your average monthly income?
• Do you expect your income to remain level in the near future?
• If not, do you expect it to increase or decrease?

Use the following income categories to estimate your monthly income:

Income Category	Monthly
Borrower's Salary	$
Co-Borrower's Salary	$
Taxable Interest	$
Investment Dividends	$
Other Income	$

Savings

Add up your savings. Any money saved can help you buy a home. Your savings can be used to pay the down payment and/or closing costs. You know your own saving habits.

• What portion of your income are you saving now?
• Can you afford to put more money into savings?

Use the following savings categories to estimate your monthly savings.

Savings Category	Monthly
Savings Account	$
Checking Account	$
Retirement Fund Contributions	$
Stocks, Mutual Fund Investments	$
Other Savings	$

Monthly Expenses

How much are you spending each month? You can expect your monthly expenses to go up when you buy a home. Will you have enough money to pay the mortgage, insurance and property tax in addition to your other expenses?

Use the worksheet below to calculate the money you currently spend each month.

Expense Category	Monthly (current)
Utilities	$
Car Expenses	$
Insurance	$
Medical Expenses	$
Clothing	$
Taxes	$
Entertainment/Purchases	$
Child Support	$

Debt

Review your current debt obligations. A lender will examine the ratio of your debt to your income when deciding how much money to lend you.

Consider how additional debt from house payments, added to your existing debt, will affect your lifestyle.

Debt Category	Monthly
Credit Card	$
Car Loans	$
School Loans	$
Alimony	$
Child Support	$
Other Personal Debt	$

You can now enter the four total amounts into our affordability calculator to help you determine how much house you can afford.