Is This the Right House for Us?

April 15, 2020 Mortgage Refinance,Mortgages

MoneyTips

Buying a home is a major commitment. Just like other major commitments (schools, jobs, marriage, etc.), it is important to do your homework and choose wisely.

Four Factors to Consider

  • Affordability – A common mistake of first-time homeowners is to grossly underestimate the aggregate and ongoing costs of home ownership. If they qualify for a $300,000 mortgage, that is the target they aim for – without regard to whether the down payment and other closing costs have drained their resources to nothing. Why buy a fancy house if you have to sit on milk crates and sleep on the floor because you cannot afford furniture?
    • Approach this as if you were a lender. Lenders calculate your DTI (debt-to-income) ratio to evaluate your ability to repay a loan. Do the same thing for yourself, projecting several years into the future. Add your property taxes, insurance, any neighborhood fees and local levies, and around 2% of the home’s cost for…

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