Here is the number one thing you need to be concerned about when buying a house and it’s not the purchase price…

For people buying a house, the prospect of the market being over-inflated, or the market is too high, or the purchase price of the house is too much those are all concerns however, there’s something bigger at stake as it relates to mortgage financing and what you should be most focused on.

The payment is what drives your ability to do anything and sustain a household budget and as a result, the payment should be the number one most important thing you’re focused on when purchasing a home. Usually, a $100k of spending power typically translates to about $600 a month of payment and conversely $50k of spending power translates to about $300 a month of payment.

When you’re buying a house in particular this market that we’re in you need to give yourself at least a $200 payment buffer. This payment buffer gives you chance to compete.  If for example $50 a month more of payment is going to make or break your decision to purchase a house you shouldn’t be purchasing a house at all, and you should go back to saving and potentially put the house buying project on the back burner for when you’re in a better financial place with your income and other monthly expenses.

So the interest rate is important, as is the cash to close is also important the purchase price is important but keep in mind payment is what really should be the determining factor because the payment supports all other expenses it supports your ability to live and also supports your ability to get ahead.

The other thing you might want to be focused on is your income. Your income as it pertains to budget income is also a driver of both savings and affordability. Let’s say your income is $12k a month, if that income is stable could be a case for biting off a tad more than originally budgeted. If your income is rising you could conceivably exceed the monthly payment buffer knowing that your income is specifically going to go up in the future, not for the purposes of overconsuming, but for the ability to compete for a house. These are some things you might want to be taken into consideration with your mortgage lender of choice when you’re looking to get preapproved to buy a home.

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