Affordable Housing is Relative to the Consumer

By: Anita

You may have spoken to developers, financial representatives and realtors who have boasted about their experience with affordable housing, but putting your confidence in individuals who stand to make a profit and have little to lose may result in misinformation. Your credit score in addition to the total of your down payment will dictate the interest rate you will be required to pay on your mortgage. When you are looking for a property, this figure will have a huge bearing on the property that will fit your budget. Of course, the estimation of "affordable" can vary enormously from one person to the next. Remember this when you see the description, "affordable," in your review of homes on the MLS.

Home buyers that have secured a comparably low interest rate and have a substantial down payment must still keep future surprises in mind. Ask yourself if you are ready to be tied down to to a huge financial commitment for the next 20-30 years? Unexpected circumstances may have a far reaching impact. Take into account the possibility of medical expenses. If you and your spouse separate, would either one of you be able to afford the mortgage payment without the others contribution? Even joyful occasions like a wedding or the need to pay college tuition could affect you ability to pay your the note on your house. With these variables in mind, ask yourself if you can still afford the house you have in mind? One way to bypass these problems is to buy a home that will not stretch your budget to the breaking point. There are distinct pluses to owning real estate too. Once you have paid towards your loan for a few years, you can access the equity that you have built. Home equity is fund that will be available for family trips, emergencies and home remodeling projects.

The probability of being able to afford the home of your dreams is determined by your credit score. Your credit rating can even be the final factor in receiving a loan. If you're not positive how your credit score will affect your ability to purchase real estate, contact a realtor. They are a great resource to find out whether you can buy the home that fits your expectations. If your real estate and banker feel that you can apply for a loan, they can give you an idea of the sum to expect. When you know how much you can borrow, and the interest rate you qualify for, you can better decide on what is affordable for your situation.

Practice discretion when it comes purchasing a home. Don't be duped by savvy illusionists that may try to convince idealistic home buyer's to spend more than they are realistically capable of repaying. Remember too that property taxes go up along with the cost of living, so even if you get a fixed rate mortgage, this variable will continue to rise even if your mortgage does not.

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