Taking out a mortgage is a confusing a stressful time. One of the first questions you need to answer is “what mortgage can I afford”? There are a number of different variables that you need to keep in mind when planning how much of a mortgage you can afford:
Annual household income is the most important factor. But it’s more than just determining how much you and your partner make. Consider also if both of your employment positions are stable. Would one salary be enough to support payments on the mortgage in the short term, if necessary? If you are planning to increase the size of your family would you then be able to continue to make the mortgage payments?
Where is the downpayment coming from? And how much of a downpayment are you able to make? A larger downpayment might enable you to secure a lower interest rate, and certainly borrowing less money in the first place means your mortgage payments will be lower.
Do you have any additional debt? When you’re considering “what mortgage can I afford” you need to keep in mind your other debts. If you’re carrying a lot of debt in car loans, personal lines of credit or credit card debt then you’ll not be able to get the best interest rate on your mortgage. Also, the less other debt you have means you’ll be able to secure a larger mortgage approval value.
Other factors which you need to keep in mind when thinking about “what mortgage can I afford” are closing costs, the amortization period, property taxes, insurance and a fund for emergency home repairs and regular maintenance. The last thing you want to do is buy a house and then be unable to live in it due to some uninsured event like a leaky roof or water pipe break and flood.
First and Second Mortgages can help you through answering “what mortgage can I afford”, and any other mortgage related question you have. Contact us today through the form to the right, or call us at (403) 543-0927, (780) 428-1222 or 1-866-405-1228 for a no obligation consultation.