If you have a plan to get a mortgage it is very important to pre plan everything. You should know how much you can afford and how much down payment you can pay for getting the mortage and what is your affordable monthly mortgage payment. To help determine this fact you can make use of home loans calculator.
This article is guide to all who want to what mortgage can i afford?
What mortgage you can afford is unique to everyone.
Normally mortgage loan lenders use many different measures based on which they are determining what mortgage is affordable for you. Every lender has their own terms and conditions. Only some are similar to all. Following are such common factors
For getting a mortgage your monthly income is the main key. When you apply for a mortgage your lender will review your monthly income statement and see the type of job you have. Mostly they will require a steady job to offer you a mortgage loan. They will look on the debt to credit ratio to determine the eligibility of the loan. You can calculate this ratio using the loan rate calculator.
If you have a part time earning that is regular for a particular satisfy able period then your lender will consider this too.
Ratio of expenses & debts
Upon reviewing your ability to repay the mortgage loan they will also look whether you can manage your other financial liabilities like credit card loans, car loans and other things. If you are serious about getting the mortgage then it is suggestible to pay off all your previous debts and increase your credit ratio.
When you pay high interest rates on other things it is possible to consolidate your debt on the home loan. Ask your lender whether you can have this debt consolidation option with your loan.
If you minimize the loan debts and so monthly interest payment on other things you can greatly increase the amount you can borrow on your mortgage.
The total money you can borrow on the mortgage loan can vary based on the purpose of the loan. If you are a property investor then you can get more than what a home buyer gets with the same criteria.
Location & property type
Due to the fluctuate economical condition the value of the property is also subject to fluctuate. So the money and the interest rate you can borrow on the mortgage will change based on what kind of property you are going to buy and the area your property resides. So try to ask the lender if you have a plan to buy a property in the inner areas and outside of your regional areas. Use the home loan interest calculator to check out the interest rate.
Interest rate and loan term
Mortgage interest rate and the repayment period will have a great impact on the amount you are going to borrow. If your mortgage interest rate is high and you have applied for the short term repayment period then you need to pay the high premium every month. Use the loan rate calculator to know how much you need to repay every month. Make sure whether you can afford to repay the premium. You can calculate the mortgage interest rate using the home loan interest calculator. You can see this calculator at every mortgage lender website.
Normally you need to pay the down payment of 20 to 30 percent on your mortgage. For example if you want to buy a home worth $2, 00,000 then your down payment at 20% is $40,000. You can get mortgages with no down payment from some lenders but it will fall under the category of interest only loans. So you should be aware the potential dangers too. To get a best deal shop around and get quotes from many lenders. Compare the interest rates using the loan rate calculator and arrive at the decision.