How Much House Can You Afford – Mortgage
How Much House Can You Afford
Syd Johnson
Your mortgage calculator says: probably a lot less than your mortgage banker says you can.
Sometimes you can qualify for a loan but you should not accept it. Why The monthly payments are more than you can afford. There are lots of laws in place at the state and federal level to protect customers against predatory lending, but there are still many customers around who will find that six months to a year into their loan they might have to give up their house. They cannot afford the upkeep, insurance and mortgage payments.
Your mortgage banker is giving you an estimate of how much they think you can afford, typically based on raw numbers such as your credit score, income, and available cash. What is not included in this equation is the human factor: Your spending habits. One way to quickly look into your financial future is to use a mortgage calculator.
Take an independent inventory of your financial situation before you approach your mortgage broker, then compare your list to what is offered by your mortgage lender. If a projected payment schedule feels uncomfortable perhaps you can rework the numbers. For example: They think that you are able to pay $3500 per month for your mortgage, but you would really feel more comfortable with $2500 per month. Maybe you can give a larger down payment and then make smaller monthly payments for the life of the loan. The idea is to confront your hidden fears about how you spend your money, and how you plan to spend it in the future.
A Mortgage Calculator is a fast and easy way to get started.
There are hundreds of mortgage calculators available to help you get a realistic picture of what your monthly bills will be after you buy a home. Even if your mortgage is the same as your rent or lower than your rent, you can end up with huge bills for heating, oil, water, insurance and incidentals such as water damage. Even if you have the best insurance policies in place, there is always the deductible plus items that are not covered by your insurance policy.
Once you move into your new home, there is no apartment manager waiting to take you out of your misery, so crunch the numbers after you are approved. Dont let the excitement cloud your judgment, because it can came back haunt you.
About The Author
Syd Johnson is the Executive Editor of RapidLingo.com, Financial Solutions Website. You can see more articles at http://www.rapidlingo.com.
This article may be freely distributed as long as the authors bio is included with an active link to http://www.rapidlingo.com.
How Much Rent is Too Much Rent – Mortgage
How Much Rent is Too Much Rent
Dan The Roommate Man
You want what every apartment renter wants: the most comfortable surroundings you can get for the lowest possible monthly rent. Some of todays newly constructed apartment communities have taken luxury to an entirely new level. Some complexes have gas fireplaces, TV monitors by the front door, drive-through mail service, and office equipment for their tenants, among other creature comforts. Every renter has to consider the importance of amenities like these. Are they important enough to you to merit a rent increase of perhaps $200 more than the rent you pay now, at a modest yet affordable complex While some of us consider an apartment as just a place to hang ones hat, others place a premium on home surroundings. But how do you determine how much you can stretch your budget -- without ending up in the poorhouse in the process
One suggestion, provided by Metropolitan Life Insurance Company, is to spend no more than 25 percent of your monthly gross income on your rent. For example, if your annual salary is $30,000 per year, or $2,500 per month, you shouldnt plan to spend more than $625 per month on rent. And although it goes without saying, its important to remember that the extra money you allocate for rent in a slightly more upscale complex means less money for your other expenses -- utilities, loan payments, entertainment, food, and most important, savings.
Heres a short checklist of factors, provided by Florida-based Apartment Hunters, that youll want to consider when checking out a neighborhood. Of course, some of these factors may mean more to you than others, and you may want to consider some additional factors of your own.
Is it close to your place of employment
Is the neighborhood safe
Is it close to a good school system
Is it close to your church
Is it close to stores, banks and the post office
Is it close to public transportation
What are the parking regulations if you own a car
First-time apartment renters share one thing in common: surprise at just how many hidden expenses they encounter. Hiring movers and paying your first months rent only represent two small pieces of what can be a rather expensive pie. In addition, youre going to be subjected to a credit check, and youre required to prove that your gross monthly income is at a certain level, in order to provide your complex with some degree of security that you can pay your rent each month. So if youve overestimated your financial abilities in the past, either failing to make rent payments or credit-card payments, now is the time when that history could come back to haunt you. Heres a brief run-down of some of those hidden expenses -- and pre-move procedures -- of which many renters either arent aware, or that they overlook in the excitement and bustle of moving:
Security deposits. Security deposits range from $100 to a full months rent; the average deposit is approximately $250. Some apartments require separate deposits for roommates. Credit application fees are generally $10 to $35.
Verifiable income. Verifiable gross monthly income is at least three times the monthly rent. For example, a rent of $500 would require a minimum of $1,500 gross monthly income.
Credit check. A credit check will be conducted by the apartment community or management company representing the community.
Rental history. Any previous rental history will be verified, and mortgage payments may be included as rental history. Additionally, some communities are also conducting criminal background checks.
Leases. All apartments require a written lease. Lease terms typically are seven to 12 months. Most leases are written for 12 months. Shorter lease terms and month-to-month options often are available at premium rates.
Utilities. You rent will often include sewer, water, trash, and pest control. Gas and electricity are almost always paid separately by the tenant.
Pet deposits. Although many apartment complexes allow pets, they require residents to pay dearly for the privilege of setting up house with Fido. Pet deposits are stiff, and tenants are charged per pet. Deposits range anywhere from $100 to $300 per pet, and either all or a portion is nonrefundable. Some complexes charge additional rent for pets -- on top of the deposit. Pet size is commonly restricted to 20 pounds and 12 inches in height, although some communities do allow larger pets.
About The Author
Since 1989 Dan The Roommate Man has helped 1000s of people find roommates. Need help Contact him at 800-487-8050 or www.roommateexpress.com
info@roommateexpress.com