© Norine Peardon, 2011

You have decided, it is time to purchase your first house. You are tired of seeing your rent payments gone with no personal equity. Where do you start the process of buying your first house? The first step is to ascertain how much house you can afford. This is actually pretty simple.

First and foremost, your housing cost should not exceed more than 30% of your disposable (after tax and deductions) income. Example:
your income is $60,000 per year, times 30% equals $18,000 divided by 12 equals $1500 per month maximum housing cost. Here, my suggestion is to stay on the low end of your housing cost and, if your household has two incomes (husband and wife), only calculate your housing cost on
one income. Why one income? The reason is that if one is laid off or loses their job, your housing cost will not break your budget due to decreased income. Keep in mind your housing cost will have to cover your mortgage payments, taxes, insurance and repairs.

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