Making smart purchases can make all the difference to your financial wellbeing. Don’t buy a home, a car or extras that you can’t afford.
Look at your debt to income ratio or the amount of monthly debt payments to monthly income. Mortgage lenders want to see a DTI of 41 percent or less. On the ideal side, you will have a ratio that is no higher than 36 percent.
Make sure that your monthly payments are manageable. Knowing your DTI will provide you with a solid guideline as far as what you can afford and what you should consider buying. Having a little extra money in the bank will help you in the long run, in case there is ever a need for it. This way you’ll stay on top of your mortgage and other obligations.
