The basic arithmetic you learned in elementary school is of great value as an adult. Understanding the numbers will help prevent defaulting on a loan and foreclosure. Hard times hit even the most money conscious people, but knowing your budget and how prices will affect you is crucial in staying afloat when those times come.
CNN Money recently published an article about a study on the connection between math skills and foreclosures. According to the article, “Bad at Math? You’re More Likely to Lose Your Home” people that had poor math skills were more likely to default on their mortgage. The article proposes that those unskilled with numbers tend to be financially irresponsible. Not budgeting and planning ahead for possible income loss or economic hardship makes keeping a mortgage very difficult.
Not everyone is math oriented and numbers can be extremely confusing. Seeking help from a budget counselor or enlisting the help of friends who are good at math are good solutions. Mortgage calculators are available online and your REALTOR can give you an estimated monthly payment. CNN Money also has a solution with its Money 101 page that provides information on making a budget, saving, investing and more.
Speak to your REALTOR about price ranges and monthly payments. He will find you a home within the boundaries you set to make sure that you are comfortable with your monthly payment.