First Home Mortgage
An individual dreams of having his own home once in his lifetime and hence he makes savings for the same since the time that thought crosses his mind.It is a very exciting prospect for the buyer to be able to get his own home as it is a necessity for each and everyone for him as well as his family.But it is more convenient if the buyer gets all the required information for the same before venturing in the project so that he doesnt need to repent later,so he should try to find out the various means through which he can afford his dream home alongwith the savings he has already made.There are mortgage companies who are eager to help the buyer in achieving his goal of owning a house since they would keep him informed about the mortgages,the different rates and other home buying tips.
How much house should I buy? How much can I afford?
Your income and your debts determine how much loan you can afford or which home you should be going for since it has been observed that many home buyers spend atleast 1 1/2 to 2 1/2 times their annual income to get a new home.
As a rough estimate for example if a buyer earns around $50,000 annually he would prefer to buy a home which may cost around $75,000 and $125,000 since they are most likely to consider it as once in lifetime investment.The amount variation depends on the area and the market price that are prevailing during the period and it may also happen that the buyer may not get the home in the budget he requires and hence he has to spend more in order to get a new home.There are certain limitation as regards the amount for mortgage or the total debts to your monthly payment.The monthly mortgage payment should not exceed 28-29% and the total debt payment which may include the credit card payments,car payments and other mortgage amounts should not be more than 36-40% of the annual income and these ratios are mostly dependent on the type of mortgage you have applied for when taking loans.
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