Wintrust Financial : 4 signs you can't afford your home, even if you were approved for a mortgage

Buying a home is the biggest purchase most people will ever make. While it's exciting, it's also an expensive process.

If you're not paying cash for your house, buying a home involves getting approved by a bank for a mortgage. It's a process that can take a lot of time, as well as a thorough review of your finances. Banks make sure that anyone they lend to can afford what they borrow. But, sometimes, it's possible to buy more house than you can truly afford.

Getting approved for the money to buy a home is one thing, but being able to truly afford it is another. If you're feeling overwhelmed by your house payment, there are four signs you might not be able to afford your home (and a few things you can do to change that).

1. Your payment is a large portion of your monthly income

One of the most obvious signs that your home is above your means is easy to spot: Your mortgage payment is a large chunk of what you earn each month.

Ideally, it shouldn't be over a third of your monthly take-home pay. Financial planner Riley Poppy previously told Insider, 'I encourage my clients to keep their home's principal, insurance, tax, and interest below 30% of their monthly take-home pay.'

If your total monthly mortgage cost exceeds that, including all the extras that come with it like insurance and taxes, it might become a significant problem in your ability to save for other goals and live comfortably.

2. Your payment is standing in the way of saving for retirement

Retirement savings are critical. If your house payment is standing in the way of this goal, you might be spending too much on your home and not saving enough for retirement.

Most financial planners and experts suggest that you'll need to save between 10% and 15% of your income each year to have enough for retirement, and that's no small amount. If you're spending half or more of your income on your home each month, that goal might be out of reach.

3. You haven't been able to save any cash for emergencies

If you've owned your home for any amount of time, you already know just how many things can go wrong. Your hot water heater could break, the roof could leak, or you just simply need to fix an old kitchen appliance. And fixing these things can be expensive.

If you own your home, a separate emergency fund to take care of things in the house is essential. Not only will it help you cover those expenses when they pop up without worry, it will also help you avoid having to take on high-interest debt (like credit card or personal loan debt) in order to keep your home in good shape.

Experts recommend saving 1% to 4% of your home's value each year to cover surprise expenses. If you're not able to save any extra cash for your home's upkeep, you might be spending too much on the home itself.

4. You've accumulated high-interest debt since buying your home

If you've noticed a significant increase in your credit card debt, or have started considering personal loans for the first time, your mortgage payment might be eating up too much of your income.

Credit card debt and personal loan debt often come with high-interest rates - credit card interest rates average about 15%, while personal loans can range from 9% to 30%. These high-interest rates can increase the amount you owe over time, and make your purchases more difficult to pay off.

If you don't have enough left over each month to cover other expenses comfortably, you might be spending too much on your home.

If you're facing any of these situations, there are a few options to consider. First, you could look into refinancing your mortgage for a lower monthly payment. Interest rates are currently at historic lows, so if you qualify for a low rate, you could see a decent dip in your monthly payment.

Another option would be to take on side jobs to boost your income. Side gigs don't have to be difficult or take up tons of your time, they just have to play to your skills. Consider making and selling items online, becoming a virtual assistant, or doing lawn care in your neighborhood. Anything you're good at (and can do fairly quickly) that's in demand.

This article was written by Liz Knueven from Business Insider and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to [e-mail].

Are you looking to buy a house? Before you start going on showings, contact the loan officers at Wintrust Mortgage to discuss your options.