Home ownership is a dream for so many people and at Cliffco Mortgage Bankers, it’s our business to help our customers achieve that dream, but we want to make certain that you understand what you’re getting into. If you’re looking for a loan to purchase a home, you need to be able to afford the home and be able to afford your mortgage payments. For first time home buyers and even those who’ve bought property before, finding the right loan may feel like a daunting task. Cliffco is here to help. We want to give you some advice on determining whether you can afford the home you’re hoping to buy or if you’ve just begun your search, we want to help you determine how much home you can afford.
Considerations Before You Decide to Buy
There are many reasons people buy homes. Sometimes it’s out of necessity, for example, if your job requires you to move. Some people look at a home purchase as an investment, others are looking to stop paying rent or are focused on quality of life issues like finding better schools.
Whatever the reason, there are several questions you should ask yourself before you decide to commit to purchasing, according to Forbes. First, you need to see if you can afford a down payment. Most lenders require a 20 percent down payment before they’ll approve your mortgage loan. If you can’t afford the 20 percent you should ask Cliffco if you qualify for other options such as FHA Loans or VA Loans.
You should also figure out what you have in your budget for a mortgage payment. There are four elements to that payment.
- Mortgage Insurance
You should note that taxes can and do go up and your interest rates are subject to change if you have an adjustable rate mortgage. But if you’re on a tight budget and not quite certain that you can make payments in the event of a tax increase, you might want to rethink taking on a mortgage.
Calculating Mortgage Costs
Another thing you should ask if you’re on a tight budget is that you have to be able to afford to maintain your home as well, so you need to have funds available to take care of home repairs and maintenance such as landscaping. For Business News also suggests you factor in your other debts such as credit card payments, alimony, child support, student loans and any personal loans you may have. They say that a good rule of thumb is that for every dollar of debt you’ll need to have double the amount in income to offset it.
Cliffco Will Help You Find a Mortgage Right for You
If you’re interested in purchasing a home, Cliffco Mortgage Bankers can help you find the mortgage loan that’s right for you. One handy tool to use is Cliffco’s mortgage calculator. First, you enter the price of the home and the down payment. Then, you add the type of loan, either a 30-year fixed term rate or a 15-year fixed rate mortgage. Finally, you plug in the interest rate and our mortgage calculator will figure out what your monthly payment will be.
For more information or to find out what mortgage is right for you, contact Cliffco Mortgage Bankers today.