Greensboro, North Carolina (WFMY) - Real estate agents will tell you that it's buyer's market. But once you take into account all of your expenses, how much home can you actually afford to buy?
"The number of counseling sessions that were providing has increased maybe 40-50 percent," explained Sarah Hutchinson, a credit counselor with Family Service of the Piedmont. She said many of her clients have overextended themselves, financially. "Really, they don't look at their budget."
According to the Federal Housing Administration, 21-28 percent of your budget should go toward the mortgage, 25 percent should be allocated for car and insurance payments, 15-20 percent should be set aside for utilities, and the remainder should be used for food, debt and other expenses.
Hutchinson said some clients she counselors spend 50-60 percent of their income on monthly mortgage payments. "They do not have enough money to pay just their household expenses," she said. "They are using their credit cards to pay for food."
For a link to a monthly budget calculator, click here.
Family Service of the Piedmont offers free credit counseling and workshops for first time home buyers. For more information, call 373-8882. The agency also offers an interest-free loan program for homeowners who have lost jobs due to no fault of their own. The loan money must be used to cover mortgage expenses.
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