Sure, you would love to own your home. You’re definitely tired of renting, but before making the leap to home ownership, there’s one question you will need to ask and answer: how much house can I afford?
Here are some basic tips to pin down the elusive answers concerning mortgage options, down payments, and budgeting for monthly expenses to help you decide if you’re financially ready to buy a home.
1. Choosing the Right Mortgage
The mortgage option you choose will affect all of your remaining decisions about down payments and monthly budgeting. Various mortgage packages are available for all home buyers, including FHA loans, conventional loans, VA loans, fixed rate loans, adjustable rate loans, and the more specialized Jumbo Loans. Your mortgage options should be thoroughly investigated and understood prior to beginning your search for a particular home.
2. Determining the Down Payment
Your down payment is one of the most important numbers to consider when purchasing a home. You should take into account your available savings, your comfort level in making the investment, and the closing expenses associated with your mortgage when making this decision. A mortgage banker can offer knowledgeable answers and guide you through this process.
3. Your Monthly Income and Expenses
As you research your available mortgage options and determine your down payment, you will need to consider your monthly income and the expense of becoming a homeowner. Items to examine include your weekly or monthly income, your utility expenses and other monthly obligations like car payments, student loans, groceries and transportation. If you maintain a checking account, you can prepare yourself to answer these questions by thoroughly examining your last six months of statements.
4. Covering the Unexpected
If you’re a first-time home buyer, you may not realize that all those calls to your landlord for repairs are now your responsibility. Storm damage, plumbing issues or a malfunctioning furnace can be very expensive.
Rest assured, there are options available that can help you protect yourself from unexpected repairs. Homeowner’s insurance, home warranties and home inspections are the most commonly considered. Many of these protections will offer plans with monthly premiums that can be included in either your mortgage payment or as an allocated monthly expense. A local realtor and your mortgage banker should be able to provide you with additional information and resources.
Home ownership is a big step. Arm yourself with a personal Total Mortgage mortgage banker who can help you make a carefully considered decision that is best for you and your family.