Can a couple making $63,000 per year afford a mortgage payment of $1100/month?

Question

Can a couple making $63,000 per year afford a mortgage payment of $1100/month?

Answer 1

very easily.  however, how many children do they have?  do they have a car payment, or will they need a new car soon?  how much money do you have left at the end of each month?  how much is your current rent or mortgage?  what kinds of things can you cut out of your budget if you had to?

I'm a single guy living on about $46,000 / yr.  $1,100 is a bit out of my reach, but  I have a car payment and some other expenses.

Answer 2

Yes, as long as you are not buried in other debt.  If you review your budget, and you find that you are saving more than $1100 per month, then it should be easy for you.

However, if you are living paycheck-to-paycheck now, and the $1,100 is significantly more than you are now paying for rent or housing, then you might not be able to afford it.

The best way to know if you can afford to increase your payment is to look at your savings balance.  If you have at least three to six months' worth of housing payments in your balance, then you are probably in good shape.  

Read the article below for more information on how to save for your first home.

Answer 3

$13,200 from $63,000?

Of course you can, if your smart!

People could make that payment on a lot less income, and have done so.

Answer 4

The best way to answer that question is to get on a budget so you understand where you are spending your money and if you have enough income each month for the $1,100 payment.

To get started you can download a free budget workbook from:  http://www.bills.com/guide/

or use an on-line tool at: http://www.kiplinger.com/tools/budget/

Here are the steps to establishing a budget, in general you will be comparing your monthly income with your monthly expenses;

1. Determine your monthly take home income.

2. List your monthly expenses; Essentials first such as housing (rent or mortgage), groceries, utilities, car insurance, car payment, car gasoline.  In place of your current housing expense put in the $1,100 mortgage payment.  Remember the cost of owning a home also includes property insurance, property tax and maintenance which need to be added to your budget.

3. Utilities and groceries will vary from month to month so determine a conservative (high) average amount.  I include anything bought at a grocery store in my grocery budget; food, cleaning supplies, kitchen and bathroom supplies.

4. Amortize your car insurance over the period of coverage, for example if you pay $600 for 6 months coverage the monthly expense is $100.  So put $100 each month in savings so you are ready for the next payment when it comes due.  A budget will help you begin to save for future purchases rather than paying for past purchases.

5. Include money in the budget for car maintenance and medical needs, these expenses come along and will ruin a budget if you don't have something saved up.  I save $50 per month per vehicle for maintenance.  After some months go by and you have savings in the bank for car maintenance, home repair and medical needs it may be tempting to spend it, but don't.  Eventually you will need the money to repair your car or for some other unexpected expense.

One other important step to take is to record your spending for a month or two.  Most people are surprised by how much they are spending for some items; eating out, groceries, snacks and treats are typical.  Controlling your spending is the other side the budget balancing equation.

Finally, don't use credit cards unless you spend only what you have in your budget and pay the entire balance each month.  A budget takes 3 - 6 months to take effect, some expenses may come along before you have money saved, but stick with it.  Your budget will catch up with any unexpected bills and you will have savings to cover the expenses the next time.

Understanding your total financial picture will help you decide if an $1,100 mortgage payment will work for you.

God bless!  

Answer 5

Anything is possible, you'll just have to budget and keep your other spending down. If the mortgage is all you're paying, then most definitely. But if you have a bunch of other bills on top of it, it might be a little bit harder. Just make sure you can afford all of your monthly bills before it, and you'll be fine.