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Home Sweet Home… But Can You Afford It?
from:You’ve finally found your dream house and are ready to commit but there’s that question of home mortgage affordability. Don’t let this thought scare you away just yet. Find out if you can go ahead and buy that house at last.
1. Know how much you have and how much you owe. How much income are you receiving at present? Is there a chance that it would increase? What will be your financial situation several years from now?
How much money do you owe to creditors? How much monthly payments do you make? Can you still afford to shell out more money after the bills are paid?
You’ll need a consistent source of income that can cover your mortgage and other expenses. Try to foresee possibilities that you’ll need to factor in: a new child, changes in the job, back-to-school plans and cash-flow five or several years from now. Be prepared to be in it for the long haul.
2. If your debts are well managed, then you can afford a home mortgage. The lender will approve your loan more quickly if he sees that your debt-to-income ratio is well within manageable range.
The lender will ensure that your payments will only total 33% or less of your monthly gross income. Otherwise, pay off some of your debts before applying for a home mortgage.
3. Decide which one you prefer: fixed, adjustable or balloon rates. Paying a fixed rate is a more popular choice because it can protect you from surges in interests while paying the lowest rate possible for an agreed period of time may be lighter on your budget, but your mortgage payment can go up later.
4. Interest rates will go up and down depending on the activity of the market. If you can read and understand market trends and economic indicators, you can save a lot of money.
5. Be prepared to pay a downpayment. Typically, it is about 20% of the total price. A house priced at $200,000 will require a down of $40,000. There are also loans with low or no-downpayments, but it will cost you in terms of equity in the long run.
6. You have enough money saved that’s equivalent to at least three months’ monthly income. This will help cover unexpected expenses that could affect your mortgage payments.
There is no fixed answer on the affordability of a home mortgage. It will all depend upon your income, debt, interest rate and other factors. If the home mortgage fits into your personal situation, then you can definitely afford it.
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Home Mortgage Financing Rate News
A Rush Into Refinancing as Mortgage Rates Fall - New York Times
 Sify | A Rush Into Refinancing as Mortgage Rates Fall New York Times, United States - Mortgage rates immediately dropped, and that led to a surge in mortgage refinancing activity for the week — even with the Thanksgiving holiday. ... US Eyes Plan to Lift Home Sales Paulson Considers New Plan to Resuscitate US Housing Market Proposal could drop mortgage rates to 4.5 percent |
Bernanke Says US Must Step Up Foreclosure Efforts (Update1) - Bloomberg
 CBC.ca | Bernanke Says US Must Step Up Foreclosure Efforts (Update1) Bloomberg - Federal Housing Finance Agency Director James Lockhart has been prodding private mortgage servicers and bond investors to cooperate with government efforts ... Bernanke says home price insurance would be costly Op-Ed: Fed Throws Refinancing Party; No One Shows Up The Fed's Potentially Very Bad Policy |
Housing stocks rise on Toll's narrower loss, report of new ... - MarketWatch
 CharlotteObserver.com | Housing stocks rise on Toll's narrower loss, report of new ... MarketWatch - Home-builder stocks traded higher Thursday. The Treasury is contemplating a proposal that would cut mortgage rates for new-home loans to as low as 4.5% in a ... Toll Reports Worst Annual Results Since Going Public (Update1) Toll Brothers Narrows Loss, but Takes More Write-Downs Toll Brothers 4Q loss narrows, no 2009 forecast |
US MBA’s Mortgage Applications More Than Doubled Last Week - Bloomberg
 Yahoo | US MBA’s Mortgage Applications More Than Doubled Last Week Bloomberg - The plan sent mortgage rates tumbling. The average rate on a 30-year fixed-rate loan dropped to 5.47 percent last week, the lowest level since June 2005, ... Mortgage Apps On Rise As Rates Drop UPDATE 1-US mortgage applications post largest gain ever FINANCIAL STOCKS Bulls outlast bears in Wednesday grudge match |
Cashing in on lower interest rates - Newsday
Cashing in on lower interest rates Newsday, NY - Home loan applications last week doubled despite the shortened workweek, the Mortgage Bankers Association said yesterday. Refinancing last week accounted ... Low rates breathe life into mortgage market |
2nd UPDATE: Builders Trade Higher, Fueled By Treasury Plan - CNNMoney.com
2nd UPDATE: Builders Trade Higher, Fueled By Treasury Plan CNNMoney.com - By Dawn Wotapka NEW YORK -(Dow Jones)- Shares of home builders rose Thursday as investors cheered the possibility that falling mortgage rates could pull the ... UPDATE: Builders Soar On Lower Rates, But Pain Persists |
Lower mortgage rates help but jobs, prices key - Reuters
 StarPhoenix | Lower mortgage rates help but jobs, prices key Reuters - A government plan to sop up hundreds of billions of mortgage securities spurred a bond rally that yanked 30-year home loan rates down half a percentage ... European stocks stage late rally ahead of rate cuts |
Yields Crash Through Historic Lows - Wall Street Journal
 Voice of America | Yields Crash Through Historic Lows Wall Street Journal - The Wall Street Journal reported Thursday that the plan, which is very much in the early stages, may raise funds to buy mortgage-backed securities by ... FTSE rises 1.4 pct on hopes of big BoE rate cut Mortgage repayments to fall by €79 and €218 a month TOPWRAP 8-Recession fears deepen, rate cuts on horizon |
CIT Group and KB Home Gain; Infineon Declines - Wall Street Journal
CIT Group and KB Home Gain; Infineon Declines Wall Street Journal - Also helping banks, mortgage applications filed last week more than doubled from the week before as borrowers rushed to lock in lower rates, according to ... Retail, financial, homebuilders lift small caps past weak data |
Refinancing a viable option for certain homeowners - Monitor
Refinancing a viable option for certain homeowners Monitor, TX - For the many locals who are still paying off subprime mortgages, refinancing is also likely not an option. But with a 30-year mortgage rate at close to 5.5 ... You can still refinance loans |