Before you go looking for houses, the first thing you need to do is to determine how much mortgage you can afford. Typically, your total mortgage should not be more than 3 times your annual salary and your monthly mortgage payment should not be more than 30% of your net income. This is to ensure that you will still be able to cover your other expenses and not end up losing your home in a foreclosure. For example, if your monthly income is $3000 after taxes, try not to go for a mortgage payment over $1000 or it may be difficult for you to put away some money to your other financial obligations. However, there are other things you can do to decrease your mortgage payment such as putting more money up front as a down payment or even extending your mortgage for a few more years. Keep in mind that the longer your mortgage length is, the more interest you’ll end up paying.
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