First-time home buyers: Know about Your Mortgage Affordability Before Purchasing

TamlynBuyer Info

One of the foremost and crucial things to decide when you are setting out to buy a home for yourself for the first-time is what are your long-term objectives. Moreover, you’ve got to evaluate whether or not those objectives are compatible with your home ownership. It may happen that you’ve planned to turn what you pay in monthly rent into mortgage loan repayments so as to own a tangible asset like a real estate.

Additionally, owning a home can both act as a sign of financial independence as well as a status symbol of being your own landlord. In that case, if you can narrow down the big-picture of home ownership target, then it’ll certainly help you point in the right direction.

What type of home do you think will suit you the best?

When looking for a suitable residential property, then there are many options for you to choose from, say for example, a townhouse, a conventional single-family home, a multi-family building with 2-4 units or a condo.

Each of these alternatives have their own distinct advantages and disadvantages – something which is completely dependent on your homeownership goals. For that reason, it is imperative that you decide beforehand the kind of house you are going to buy.

What is the mortgage amount that you’ve qualified for?

Prior to your market survey, it is good to find out the mortgage amount your lender is prepared to give you. It may happen that according to you, you can easily afford a $300,000 mortgage but then, lenders may come up with a totally different figure like $250,000.

Your loan amount will be decided on the basis of a lot of factors like the total amount debt payments you are currently making, your total savings, monthly income, investments, other real estates owned, and so on.

Why should you use a mortgage calculator?

You need to find out how much mortgage you can exactly afford and what better way to do that than with the help of some financial calculators that will let you know about your mortgage affordability, before filing in your loan application

While buying a house, you may be curious to find out its total cost and not just the monthly payments. Considering the monthly loan repayments, you’ve got to know exactly how much it will be after you buy a home with a mortgage.

Moreover, there are other home ownership costs like down payment, property taxes, private mortgage insurance (if required), home improvement expenses, loan origination expenses, closing costs, etc that you’ll have to take into account seriously.

Who’ll get a suitable home, and close the home purchase deal for you?

In this case, real estate estate agents can be a crucial link between you and the seller. It is the part of their job to locate properties for home-buyers like you, as per your requirements and budget. Moreover, a competent real estate agent will always accompany you when you are visiting any available homes.

It is your real estate agent who’ll start off with the negotiation process with the seller once you’ve selected a home to buy. She’ll help you determine the home’s value, write an offer (a purchase contract) and make the offer on your behalf after assuring that all the loan and other documentation are complete.

Finally, it is the level of expertise and the amount of experience of a real estate agent that will help you to find the most appropriate home at the price you can afford and then help you through the due diligence to avoid any potential hazard after your offer is accepted.