The joy of home ownership is an unimaginable feeling that many people yearn to have. Having your own house gives a sense of pride and accomplishment. Here is where you can put your signature of style, elegance and perfection. Paying for this house however takes some decisive planning and effective decision making, coupled with financial prudence. A mortgage is usually desired in times like these. But there are two crucial questions that need to asked and objectively answered: How much mortgage can I afford? and for a mortgage how much can I borrow?
How much can be afforded
How much mortgage can I afford? This will depend on the financial position of the persons desiring the mortgage.
- Make a budget of what you have and what you will need and then make the decision.
- Seek professional assistance. A Local financial institution will tell you how much you can afford and how much you can borrow.
- Assess your situation carefully.
- Try to take a larger mortgage than is absolutely needed.
- Do a simple income and expenditure statement, this will determine how much you have to allocate for the mortgage.
The following provides some insight; based on your financial standing, you can answer the questions as to how much mortgage can I afford and how much do I need.
Lenders will offer several tailored loan programs in which small downpayments can be made coupled with other benefits. Some programs will seeks out first-time home owners, while others fundamentally help people who generally fall in the lower income bracket.
Here’s a brief summary of some of the more popular programs:
Department of Veterans Affairs, or VA, mortgages
Supported, but not distributed, by the U.S. government, these loans aid veterans, and their spouses to purchase homes. No downpayment is usually required (except for relatively high priced properties) and other conditions may apply.
The website http://michaelbluejay.com/house/howmuchloan.html offers some useful tips on determining exactly how much mortgage can be afforded.
What Can I Afford
Mortgages or any other loan is normally calculated as a percentage of your net income, or the income of all the applicants. Based on this income figure, one can know how much mortgage they will be able to afford. Many persons only can afford houses that cost up to three times the annual income of the household, if one makes a 20% deposit and have no significant other debt. If one has little to no debt and can allocate 20%, then they can buy a house four times the value of thier annual income
If you are unsure about how much you can afford, it is always advisable to speak with a reputable financial advisor.
Additional Reading on Home Mortgages
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- Private Mortgage Lenders
- Get the Best Mortgage Rates
- Mortgage Rates
- Should I Refinance My Mortgage?
- How Much Can I Afford to Spend on a House?