JUST LISTED!!!!!1663 S. Elizabeth St. Denver, CO 80210Listed By Kevin Fletcher, Realtor - Exit Realty Cherry CreekList price: $789,0004 Beds3 Baths2,209 Sq
How Much House Can You Afford And Still Retire Find Out Here
“How much house can I afford?” and “How much house can I afford and still retire?” These are different questions, and it’s important to understand the difference. Those who do, can likely retire. Those who don’t, probably can’t.
The typical mortgage formula allows you to borrow 3.5 to 4 times your annual income to buy a house. At that level, you’ll likely spend 30 percent to 35 percent of your gross income on your mortgage payment. Add another 20 percent to 25 percent for taxes, and half your income goes to creditors (the bank and Uncle Sam). Then you’ve got other things to pay for, like food, clothing, education costs, child care, health care, and the list goes on.
If you want to save to help ensure a secure retirement, you need to sock away about 12 to 15 percent of your pay every year. Most people can’t do this because their mortgage consumes about 12 to 15 percent more of their monthly income than it should.
To simply your calculations, consider borrowing no more than 2.5 times your household income. This should leave adequate room to save for retirement. Budgeting might seem intimidating, but spending time to understand the basics of your own income and spending capacity will pay dividends down the road. If you’re confused about your budget, an accountant or a certified financial planner can help. These decisions are too important to leave to guesswork.
As a Full Time real estate agent for the past 23 years, Sheryll has helped hundreds of home owners in Colorado buy and sell their homes. Sheryll's easy going, no pressure style and her in depth knowl....
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