So you're thinking about buying a home and don't know how much you can afford. A general rule of thumb is - you can buy a property that costs 2 to 3 times your income. So, if you make 40K per year, you can afford a house between $80,000 and $120,000.
To be more specific, your mortgage payment shouldn't be more than 28% of your gross income AND your mortgage payment plus all your monthly payments should not be more than 36% of your gross income. Fewer debts makes it easier to buy a house so if you're thinking about Home Ownership, then avoid any purchases on credit - especially that new car!
If you are thinking about Buying A Home, contact a mortgage lender and talk it over with them. I know several that will talk things over with you without any pressure. They will tell you what you can afford today and if you want more house, they can help you plan for the future. If a lender tries to pressure you into buying NOW - walk away.
If you'd like to take a look at any homes for sale in the Hoover or Greater Birmingham, Alabama area, let me know at http://www.tonibird.com/.
