Finally buying your dream house become a reality. But, the question is how much can you afford to suits your current financial situation. There are few things might be in your consideration when deciding to buy your first home mortgage. Don't let this thought stop you from achieving your first home mortgage. Here are some guide for you to consider whether you are ready to commit paying your first home mortgage loan.
1. Ask yourself how much earnings you are getting now? Is there any possibility to rise up? Next, how much money in debt? Consider your economic condition after several years from now. You must sum all the bills and calculate how much money you have to pay monthly after decide taking your first home mortgage loan.
2. If your debts are well managed, then you can afford your first home mortgage loan. Your first home mortgage loan officer will ensure that your payments will only total 33% or less of your monthly gross income. Otherwise, pay off some of your debts before applying for your first home mortgage loan.
3. Decide which one you prefer: fixed, adjustable or balloon rates. Paying a fixed rate is a more popular choice because it can protect you from surges in interests while paying the lowest rate possible for an agreed period of time may be lighter on your budget, but your mortgage loan payment can go up later.
4. Another important factor to consider when taking your first home mortgage loan is preparation to pay on down payment. Typically, it is about 20% of the total price. A house priced at $200,000 will require a down of $40,000. There are also loans with low or no-downpayments, but it will cost you in terms of equity in the long run.
5. You have enough money saved that's equivalent to at least three months monthly income when deciding taking home loan for your first home mortgage. This will help cover unexpected expenses that could affect your mortgage payments.
There is no fixed answer on the affordability of your first home mortgage. It will all depend upon your income, debt, interest rate and other factors. If taking home mortgage loan fits into your personal situation, then you can definitely afford it.
First home mortgage