Step 6 – Create a Spending Plan

Remember that although the people at the bank can find out many things about your financial history, such as your income and your debts, they can never know exactly how much money you spend every day, every week, and every month for living expenses.

You are the only person who is capable of knowing for sure how much money you can afford to pay each month for a home loan.

You do not have to rely on a bank to tell you this. The first step is to be completely honest with yourself about how you spend your money. Keep using the Track Your Spending tool and understand Tips for Sticking to A Spending Plan. It will help you figure out for yourself how much you can safely afford each month for a house payment.