Your income- how it relates to what rent you should be paying

Most financial experts recommend you keep housing costs to 30% of your income or less. If you can’t find a home that’s affordable based on this ratio, consider waiting to buy until your income increases or you’ve moved to an area with a lower cost of living where your home won’t take such a large percentage of your take-home pay.

Many home buyers are housing-burdened because their mortgage, property taxes, insurance, and other costs exceed 30% of income. While you technically can purchase a home that will put your payment above this threshold as long as you meet qualifying criteria for a mortgage it will be much harder to accomplish other goals such as saving for retirement.

Having a stable source of income

You’ll also want to consider how long you’ve been earning your income and how stable your source of income is. Typically, mortgage lenders want to see steady income for at least two years. If you just increased your income last month, lenders may consider a lower amount when deciding how large a loan they’re willing to give you. And if you have reason to suspect you’ll lose your job or see your income decline, buying a home and committing to a mortgage is probably a bad idea.

A bit about us at Surreal Property Group

Here at Surreal Property Group Bayswater, we are a family run business with our background being from country Victoria. We bring the openness and honesty that comes with family and country living to the property market in the South East suburbs of Melbourne. We pride ourselves on looking after people, we don’t push people into buying or selling, but instead offer sound, educated advice on the state of the property market so that people can make great choices with investments, renting or buying a home.

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