We all know that buying a home is going to be one of the biggest decisions you ever make in life. Not only is it going to be the place where you settle down to raise your family, but homes are very expensive. Unless you are independently wealthy and can buy a home for all cash, you are going to need to apply for a mortgage to pay for the home.
The good news is that if you have some money in the bank and a good credit history, getting a mortgage can be much easier process for you. But, before you get involved in the process, and before you even start looking at houses to buy, it is a very smart idea to make sure you understand all of your home finances so you know exactly what you are going to be able to afford.
Now, to many people, all these numbers seem very complex, but it doesn't take a finance degree to be able to have a good understanding of how the process works. That's why many mortgage companies, and even a lot of real estate companies offer up an affordability or mortgage calculator right on their website. Of course, these calculators are not going to be able to give you the exact financial information you need right down to the penny, but they are going to provide a great start to get you going to see how the numbers are going to work out.
Many people think that as long as their mortgage payment is less than their income, everything will work out fine, but that's not necessarily true, and more advanced affordability calculators are going to be able to take into account things like your credit card bills, student loan payments and car payments, for example, and deduct those from you monthly income. This is going to be able to give you a much better picture of the amount of a mortgage you are really going to be able to afford.
Once you have a general idea of what you are going to be able to afford, then take the steps to apply for a mortgage pre-approval. This way you are going to have a dollar figure in hand that you are going to be able to work with. May people might be pre-approved for a much larger amount than they want to spend, that is perfectly fine, because they have done their calculations to know what is going to work within their financial situation and budget.
From there, it's time to get to the fun part, house hunting! Once you have calculated all of your finances and have applied for pre-approval, much of the guesswork has been taken out of the process. Now, you will be able to proceed with looking at homes and determining which one you love. It is a great feeling to be able to confidently look at homes you know you will be able to afford and start planning for your family's future in your new home.
Use an Affordability Calculator When Figuring Out Mortgage C