Tip 2. Decide what house you can afford to buy
You can allow a banker or other lender to determine how much house you can afford. Such determinations are based upon your income and other debt obligations. But when a lender says that you qualify to borrow, let's say, $500,000 for a house purchase, this does not mean that you can afford to spend that much on a home. A lending firm does not know about your financial situation. The lender doesn't know if you have fallen behind in saving for retirement, want to save money to start your own business, or have a lot of kids. Do not forget about the other costs of owning a home. Besides mortgage payments you will have property taxes, homeowner's insurance, and maintenance and improvement costs (which are about 1% of the cost of the house). On the other hand, there are many benefits of being a homeowner. One of the treasures of homeownership is that the IRS allows you to deduct mortgage interest and property taxes from your annual income tax. Also, a home is a good investment because house prices increase each year. The most important treasure of homeownership is having the life style you want and deserve - living in a comfortable and beautiful home where you can enjoy yourself and raise your family. You have to think about what is important for you before making a final decision on what house to buy. Check the numbers that lenders give you and adjust them to your personal goals:
How Much House Can I Afford?
When you apply for a mortgage, lenders examine your credit history, which is detailed in your personal credit report. Credit reporting agencies as well as creditors who report information to the agencies and to other creditors make mistakes. Click just below to get a copy of your credit report and check it for erroneous information:
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You can find plenty of lenders online, and they will give you precise information on the lending process. Link to our lender, who has provided affiliate services to MiaDomo, or shop around and see what lender best suits your needs:
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For more information please look at our Mortgage & Loans section.
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