First Home Buyers Wonder: Can I Afford To Buy?

First home buyers often wonder how they’ll know if they can afford to buy their own house. While lenders have ratios and calculations to determine if a buyer can afford a home, autocar-australia it’s a little more complicated than that. Remember, lenders will only look at your ability to repay the loan. To do that they’ll examine debts on record, such as school debts, credit cars or auto loans and compare those obligations to your income.

However, there are many things lenders do not consider in their calculations, namely how much the buyer wants to save for retirement or a rainy day as well as lifestyle choices, i.e. how much you need to support your desired lifestyle. Only buyers can determine their needs, which is why it’s a good idea for first time buyers to have a general idea of how much home they can afford and if they are willing to possibly make sacrifices to achieve the dream of homeownership.

Examining Income Vs. Expenses

Before you even begin looking at houses you should examine your current income and expenses. Are you able to pay all of your expenses and still save some money every month? Are you comfortable or are you barely managing? Keep in mind that even if you’re already living on your own and paying rent, ownership is more expensive. There are additional costs such as insurance, utilities, repairs and maintenance and the inevitable unexpected costs to consider.

The first big hurdle for first time buyers is the down payment or deposit. 10-20% of the purchase price is usually recommended for the deposit. If you want to buy a $300,000 property that means you’ll need a $30,000-$60,000 down payment deposit. If you are able to save up enough for a 20% deposit, more info please visit sites:- you’ll be in much better shape to handle the costs of ownership.

How To Calculate Mortgage Payments

Lenders prefer that the mortgage payment be no more than 30% of the buyer’s gross monthly income. To figure out your maximum monthly mortgage multiple your gross monthly income by.30. That number is the maximum monthly mortgage payment lenders will likely qualify you for.

Impact Of The Deposit On The Monthly Mortgage Payment

One way to reduce the size of your monthly mortgage payment is to provide the biggest down payment deposit you can. The deposit reduces the amount of the loan and hence, the monthly payment. Larger deposits give buyers access to better loan terms and lower interest rates, Vegan leather bags which saves thousands of dollars over the life of the loan.

First Home Owner Grant Can Help You Get In To A New Home

Saving up 20% is difficult for many buyers but even without 20% down you can still get a mortgage; your terms will just be different from those who can provide the 20% deposit.

The First Home Owners Grant is one way to make ownership more affordable for first time buyers in Australia. This grant program provides up to $7,000 for qualified individuals. Since it is a grant program offered by the government, fashion tape it does not need to be paid back and can help make it more affordable to purchase a home.

Don’t Set Your Sights Too High

The biggest reason first gold coast clear carts home buyers get discouraged is because they set their sights too high and look at houses that are out of their price range. Determine your maximum mortgage amount and look at properties within that range. Plenty of suitable starter properties can be found.

Homeownership requires significant financial investment. In the long run it’s best to wait until your finances are stable and you can meet the income requirements before delving in to this new chapter of your life. discreet firearms plug Renting until you can save up the 20%, have paid down your debt and have a stable income may be the best course of action.


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