| How much should you borrow? is a question people | | | | current expenses for food, clothing, and other regular |
| with adverse credit wrestle with. The answer is | | | | bills. Next, decide on an amount to pay for the home, |
| simply as much as you can afford. This is probably | | | | which include both the mortgage payment and home |
| less than what you will qualify to borrow from a | | | | repair expenses. Most experts recommend paying no |
| mortgage lender. To determine what you can afford, | | | | more than a third of your gross monthly income to |
| factor the mortgage payment and other home costs | | | | home expenses. |
| into your budget. | | | | One factor to consider is that your mortgage |
| Cost Of A Mortgage | | | | payment will not go up, but more than likely your |
| Your mortgage payment is not just the loan | | | | income will. So through the years, your mortgage will |
| payment; it also includes real estate taxes, | | | | take a smaller percent of your monthly income. |
| homeowners insurance, and private mortgage | | | | However, you dont want to place yourself in too |
| insurance premium if you borrow more than 80% of | | | | tight of a financial situation by planning on yearly |
| the homes value. These three items often add | | | | raises. |
| several hundred dollars to your monthly payment. | | | | Get A Pre-approved Mortgage |
| Cost Of A Home | | | | Another way to find how much you can afford is to |
| Unlike renting, you will be responsible for utility | | | | apply for a pre-approved mortgage. The mortgage |
| payments for your home. Home utilities are usually | | | | lender will approve you for a maximum amount, but |
| higher than an apartment since you have more area | | | | you can borrow less than this. While you are going |
| to heat and usually a lawn to water. You will also | | | | through the mortgage loan process, ask how much |
| need to plan on making unexpected home repairs. | | | | the monthly mortgage payment will be. |
| This can include fixing a leaky faucet, replacing | | | | Shop Prices |
| appliances, or remodeling. | | | | When you do start looking at homes, ask about |
| Plan A Budget | | | | taxes. This often overlooked area makes a significant |
| Before you complete the process for a mortgage | | | | impact on your budget. Also, expect taxes to |
| loan, plan out your monthly budget. List out your | | | | increase as the value of your home rises. |