Rent may be too high, but it still may not be time to buy
Decisions » Weigh current finances, future plans before jumping into homebuying pool.
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"You should base your budget decisions on your net income rather than your gross income," says Behnam. "A lot of buyers estimate their payment based on the principal and interest they pay, but you also need to include property taxes, homeowners’ insurance, homeowner or condo association dues and possibly mortgage insurance and flood insurance."
Behnam recommends keeping a cash reserve equal to two mortgage payments in the bank to cover potential home repairs in addition to your emergency fund of three to six months or more of expenses.
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