Here's how to know if you'e ready to afford a home.
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00:00You know, the sad thing is a lot of you think, all right, I'm renting a place right now for
00:04$2,000 a month. I find a home that I like and the mortgage is $2,000 a month. And you think,
00:09well, obviously I can afford that. Don't be silly, everybody. $2,000 a month of rent is not the same
00:16as $2,000 of a mortgage. Besides the mortgage payment, you have property taxes, you have
00:21insurance, you have maintenance. You should increase that $2,000 by 40%. And can you afford
00:30$2,800 a month? And you know you can really afford that if for six months before you actually
00:37purchase it, play house. Put that $2,800 every month or $2,000 to your rent and $800 in a money
00:43market fund for at least six months. Do you have enough money to function well? Do you still have
00:50an eight-month emergency fund? Are you great with all of that? Are you totally out of debt?
00:56If so, you can afford a home.