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B009PS - Mortgage debts - Factors which can drastically affects your affordability part 2

Mortgage debts – Factors which can drastically affects your affordability part 2

Hi folks…Hope you are enjoying my posts, I am honestly trying to provide you as much information as possible in within a concise version. Here goes the 2nd part of my last post, enjoy.

Would you like to be house poor

The term ‘house poor’ means you cannot pay for maintaining your home. Normally if you have to pay up a large portion of your earnings towards your home, you may not have enough funds left to support your family and maintain other expenses. Many people wanted to become  an ‘house poor’ because they have the trust that it’s a good decision to buy a valuable home that they can afford. They might ignore the fact that they are going to stretch their financial boundaries a little further. The concepts is like that, in future the total earning will increase through continuous  raises and promotions, the old expensive mortgage will be getting smaller day by day and consume a very small part of their monthly income.

Clearly, people eagerly waiting to be ‘house poor’ have their own personalized and customized self-protection depending on what kind of loan they are afford..

Personal Specifications

Your personal choice always matters while deciding whether to be a “house poor” or not.  You may get approved for a mortgage loan, but it doesn’t mean that your future monthly payments will be affordable for you. So, in addition to the lender’s criteria, you must also keep in mind some personal issues and set some specific factors of your own:

1.Income –  When judging your own capability to repay your mortgage, ask yourself the following questions: –

Do you have to depend on two separate income sources for paying down your bills?? Do you have a stable job? If required, do you have the guts and chances to get another job with same or better income?? You can assume your current debt expenses through calculating the back-end-ratio, but what about those expenses which you haven’t generated yet? Will you have children in high-schools or in college in near future? Do you have plans to buy a boat, truck or a new vehicle? Does your enjoy a vacation with your family every year?

2.LifestyleWill you compromise with your lifestyle just to get your dream home? If you can limited your shopping and tours to the mall, tighten your budget to match up with a higher back-end-ratio, it might work for you. But If you can’t live without a fresh “Subway” burger every morning or a chilled beer every evening, you might have to wait long enough to fulfill your dream of a good home.

3.PersonalityDifferent individuals have different personalities regardless of their earning. Few people can take a nap without worrying about their $6000 per month payment for the next 25 years. But there are some more people also who will not take a deep breath until they pay back the larger part of their dues.  While opting for a refinance, this quality can make a big difference about your decision.  If you can keep your nerves steady, without worrying do the shopping for your home, I am sure you’ll be very much pleased and satisfied with what you have done. It will give you a mental peace also.

To be continued….