You are decided to provide your family your dream house since your kids are growing and also tired of renting an apartment. Buying a home is one of the biggest financial decision that needs to analyze your financial capability since it is definitely not cheap.
Here are some things to consider before engaging yourself to pay for mortgage payment for your dream house.
- Check out if the family income is capable of having monthly mortgage payments for a least a period of time. It is likely that you will be paying for mortgage loan for a minimum of 5 to 7 years and sometimes it take as long as 10 to 20 years to pay back a home loan in full.
- Verify if you are qualified for a home loan. Having enough money for a down payment does not mean that you are automatically guarantee that your will pass the pre-approval for home loan. The bank will check if you are financially ready to buy a house. Applicant may require to submit a bank statement from the past 6 months and a latest income tax return statement or payslip for the past 3 months so that bank may check if the applicant or borrower has the ability to pay for the loan. Also, bank will check if the borrower has any existing loans or debt such as credit card history.
- Know what you can afford. Inquire to different banks and lending institution and compare home loan rates. You can collect leaflets or brochures of different banks and know the best offer possible that within your budget.
- Make sure to have extra budget for other expenses such as emergency funds. The extra cash should not be taken from home loan budget. Missing your monthly amortization can have big concerns.
- Be honest to yourself. Sometimes we make decision out of nowhere and we tend to ignore reality. You need to be honest with yourself and analyze your situation because settling home payments involves a long-term plan which not only includes amortization but also taxes and possibly maintenance and insurance. Some thinks that buying a home will be easy. One should be realistic about the time, effort, money, stress and hassle toward being ready to move forward. Talk to some people who can show you the ins and outs of real estate and purchasing a home and ask question about the things you don’t understand before making decisions. There always time for everything.
- Be mentally ready. Make sure that you and your partner are not just financially ready to start monthly amortization but ready also physically, psychologically, and emotionally prepared. Buying a home is like having a child altogether again.