What Can You Afford in a New Home
February 5, 2009
When it comes to purchasing a Tulsa home for the very first time, you may not be ready for everything the lending company has in store for you. Before you rush out and apply with a lending company, you should do your homework.
Most everyone can be approved for a Tulsa home loan, no matter what their credit rating is however affording the monthly payments is another story. Of course, when you apply, the lending company or realtor is going to tell you they can get you approved for the loan. If you have a house in mind already, this could be a huge mistake. Let’s say the home is $130,000. You talk with the realtor and explain that you have a few bad things on your credit report and they reply do not worry, our lending company can get you in this home. Now, you proceed with all the paperwork and wait to hear what your monthly payments will be.
If you are like others looking to purchase your first home, you will think that you are going to get 8% interest which would bring the total of your home to $140,400 along with other fees. Now, divide that up by 30 years and your base payment would be per year $4,680. However, nothing is, as it seems. In some cases, the interest is compounded monthly or in other various ways. This changes the payment and if you do have any problems on your credit report you will be looking at a much higher interest rate up to 21% which would raise the price of the home at least $27,300 according to how they add the interest. In addition, if your credit is not perfect they will not give you a loan for 30 years you may be looking at only 20 years. All of a sudden now, your low monthly payment has reached near $2,000 per month all because of the interest rate.
You may still be able to get the loan however, your mortgage payments may be very hard for you to achieve each and every month. This can become a major problem down the road if you go ahead and purchase the home if you do not believe you can afford the payment.
The best thing to do before finding the home of dreams is to get pre-qualified for a home loan that you know you can afford. To learn what you can afford, sit down, make a list of all of your total income per month, all of your payments including credit cards, etc, and then see what you have left. Now, out of this amount what can you comfortably afford to pay to own a home? When you talk with a lending company stick to your guns – have a low and high figure for your monthly mortgage payment and do not go over what you know you can afford. If you do, you may default on the loan and not only lose your home but any good credit that you now have on your credit report.
We will work hard to be YOUR Tulsa Real Estate Agent! We are the Tulsa Homes experts and will work hard to find the home of your dreams. Call Toll Free Direct at 1 (877) 738-8572 today.
