The first step to becoming a first-time homeowner or even if you are looking at selling and purchasing a new home is to find out what the maximum home mortgage you qualify for is. Sometimes you learn that you don’t qualify for as much as you hoped, and other times it can be far more than you thought. If you fall short, you can opt to look for a lower-priced home or wait until you can improve your credit or financial health. If it is more than you thought, the question becomes whether you should get as much house as your preapproval has indicated you can borrow or if you should aim a bit lower. Here are some questions to ask yourself that will help you decide what direction to take regarding your home mortgage.
- How would the monthly payment, including principal, interest, taxes, and insurance compare to what you are currently paying for housing? For you to go with an amount higher than that, you have to decide what else in your budget will take a hit. Can you accept putting less into savings or your retirement account, having a lower entertainment budget, or planning a less costly vacation each year? On the other hand, do you have plans to increase your income accordingly?
- Are the homes you are looking at in that price range or lower? If you can be perfectly happy with a home that costs less, it might be prudent to not borrow the maximum. You could take the difference in payment and put it into a savings account each month so you could trade up later if you decide to. On the other hand, if your dream home is closer to the maximum, don’t settle and be unhappy for the next 30 years.
- Were you honest and complete with the information you provided? A preapproval utilizes the information you gave to them without doing full fact checking yet. If you fudged a bit, it is likely the home mortgage you actually qualify for will come in lower when they’ve received all the documentation.
These are just a few of the things to consider when you are getting a home mortgage and learn you qualify for more than you thought. When you contact us at Centum Mortgage Store, Ltd., you will learn the maximum mortgage amount and other relevant information, such as terms, and whether you could put some of your high-interest debt into your home mortgage to strengthen your financial plan for the future. With access to lending options you cannot find on your own, we’ll counsel you and assist you with making a sound decision for your financial health and home purchasing objective.