So let’s get it out there…
Mortgages come in all shapes and sizes depending on an individual’s needs. Before you start shopping for a home or a mortgage it’s important to sit down and evaluate your financial situation.
How much debt do you carry? How much do you make per year? How much do you spend each month on living and lifestyle expenses?
I am a mortgage lender and this is what I tell my clients. Loan approval does not = affordable. You alone should determine how much you can afford. Do not rely on the lender to tell you what you can afford. I will tell you what you can qualify for and often times it is much higher than what you will be able to afford. This is why I make it a point to sit with my clients and review their current debts to determine the affordability. We also review the size of the home to determine how much it will cost to heat/cool the home monthly (even when the seasons change). We will review the cost of water, sewer, electric, refuse, homeowner's insurance and property taxes. All of the additional costs that come with owning a home. We review all areas the consumer can save money also.
So, how do YOU determine how much mortgage you can afford? One way to determine what you can afford is to subtract your total monthly expenses (excluding your rent payment) from your total monthly income. The difference should equal an amount that exceeds the monthly mortgage payment you expect to take on by several hundred dollars. Don’t forget to add up your cell phone bill, cable, internet, dry-cleaning expenses, coffee shop, eating out, shopping and fun money. This will also help you realize you may be spending money in an area that is unnecessary.
Always consider the following factors:
• Your current financial situation
• Your future employment intentions
• Any plans for aging parents?
• Your future plans to have children
• Home repair costs and maintenance
By analyzing your personal financial situation and your near future plans you will ensure that your mortgage expenses are not out of control in the event of a drastic change in income. It will help you feel more comfortable about the mortgage amount, amount of debt and the monthly payment you will feel most comfortable with.
Approaching your financial situation in this manner all plays into being a responsible homeowner and ensures that you will enjoy homeownership for years to come!
It's the perfect storm for many people right now. Rates and home prices have never been lower. Find out what size of a home you can qualify for today. You could be pre-approved by tomorrow.
Have a mortgage question? I have an answer. Feel free to email or call me today.
I look forward to becoming your lender of choice!
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