There’s no doubt that we are living in tough economic times and for many of us, that means that we are going to need to take drastic measures.  One of the largest bills that many of us have which is also one that we would certainly not want to get rid of is our mortgage.  We need to live someplace and if we don’t have a home, we would just end up spending money on rent for the rest of our lives.  If you find yourself in a situation where you are having a difficult time making ends meet in your older years, you might want to consider getting a reverse mortgage.

There seems to be a lot of mystery that surrounds the reverse mortgage but the simple fact is, it is not all that difficult to figure out.  If you own your home outright or if you have a considerable amount of equity in your home then you are able to get money to live on from that equity.  You would take out a home loan in the form of a reverse mortgage and you would either receive a lump sum or you would receive payments over a period of time.  This is where the beauty of the reverse mortgage really comes in.

Instead of making payments on the money that you receive from your existing home, the bank is going to be making the payments and those payments are going to be adding up over the course of time.  Even if you should happen to get to the point where the amount that they pay in exceeds the amount that you receive, you will still be able to live in your home for the rest of your life.

There are some pitfalls that are involved with a reverse mortgage and you certainly should be careful if you decide to take one of these home loans.  First of all, you’re going to have to reside in your home for the rest of your life because if you move out for one reason or another, you may have to forfeit the home to the bank.  You also want to make sure that nothing else is being tied into the loan so find a loan officer that you can really trust with this all-important decision.  A reverse mortgage can be exactly what you’re looking for and can help you to live out your latter years without having to worry about where you’re going to get money.  Look into the possibility of having one of these on your home.

If you’re asking yourself that question, be warned, many people end up getting in way over their heads by taking on morgages that they don’t have the means to support. Equally, if you were to go up and ask different people, “Hey, how much morgage can I afford?” you’ll probably end up with different answers, and in the process become thoroughly confused.

Basically, it all comes down to a question of your personal income and expenditure. Now, if you’re earning a constant rate, and have some savings, then it shouldn’t be too hard to figure out the means within which you should operate.

In these cases, the answer to that pesky question of, “How much morgage can I afford?” would simply be a percentage of your income minus your expenditure. Some people make the mistake of trying to pay everything that is leftover from their income, but this means that there will be nothing left in case of emergencies.

By figuring out how much you can afford monthly while still having at least some left over to go into savings, you will be able to estimate the morgage that you can afford in the best way possible.

At core, the same principle would apply if you are without a steady monthly income; however it might be a lot harder to estimate a fixed monthly rate that is within your comfort zone. Therefore, if you find yourself in those shoes it may be necessary to ensure that you have enough of a bank balance to be able to deal with fluctuations in your income.

In short, the best answer to “How much morgage can I afford?” is “However much you have left over every month, minus some to go into savings.”