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Wednesday, January 21, 2009
Before you begin looking for a new home to buy whether it be in Nashville or any other US city you need to look at what you can realistically afford to spend on it. This is something that not only first time buyers have to take into consideration but also those who are choosing to sell the home they live in currently. It does not matter whether you are buying a Nashville home or one in another part of the US you really do not need to be realistic about what you can easily afford.
There are certain things that you will have to take into consideration which will help you to determine just how much you are able to spend on a new home that won't cause you financial problems in the future. Below we take a look at just what some of these are.
1. A great way for you to determine just how much you can realistically afford to borrow in order to buy the Nashville home of your dreams is to time your annual income by 2.5. This you can then use as a guideline for when you start your first house searches, although you may find other factors will influence what you really can borrow.
If you use this calculation it will assist you in being able to determine how much you are likely to get when you apply for a pre-approved loan. With the way the financial markets are currently a person who has a pre-approved home loan is in a much stronger bargaining position when it comes to making an offer on a property.
2. A lender will look at not only what you earn but the price of the house and will determine whether you can afford to make the repayments on the loan you have applied for. Ideally you want to be making monthly repayments on such loans that use up between 25 and 33% of your gross monthly income. Anything more than this and you will find that a lender is much less willing to provide you with the finance you need.
3. Lenders are far more willing to provide loans to people who have a good credit history. The type of people they want are those who can show that they are able to easily repay any debts they have currently and that these are no more than 40% of what they earn each year.
Above we have looked at several factors that you need to be taking into consideration when trying to determine what you can afford to borrow in order to buy that Nashville home you always wanted. However there are numerous other factors which can affect just how much you can afford to borrow today when trying to buy a property. Interest rates along with the kinds of mortgages available are other things that you will need to take into consideration.
There are certain things that you will have to take into consideration which will help you to determine just how much you are able to spend on a new home that won't cause you financial problems in the future. Below we take a look at just what some of these are.
1. A great way for you to determine just how much you can realistically afford to borrow in order to buy the Nashville home of your dreams is to time your annual income by 2.5. This you can then use as a guideline for when you start your first house searches, although you may find other factors will influence what you really can borrow.
If you use this calculation it will assist you in being able to determine how much you are likely to get when you apply for a pre-approved loan. With the way the financial markets are currently a person who has a pre-approved home loan is in a much stronger bargaining position when it comes to making an offer on a property.
2. A lender will look at not only what you earn but the price of the house and will determine whether you can afford to make the repayments on the loan you have applied for. Ideally you want to be making monthly repayments on such loans that use up between 25 and 33% of your gross monthly income. Anything more than this and you will find that a lender is much less willing to provide you with the finance you need.
3. Lenders are far more willing to provide loans to people who have a good credit history. The type of people they want are those who can show that they are able to easily repay any debts they have currently and that these are no more than 40% of what they earn each year.
Above we have looked at several factors that you need to be taking into consideration when trying to determine what you can afford to borrow in order to buy that Nashville home you always wanted. However there are numerous other factors which can affect just how much you can afford to borrow today when trying to buy a property. Interest rates along with the kinds of mortgages available are other things that you will need to take into consideration.
posted by Credit Counseling at
4:14 AM
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