The answer should come from your
gut instinct and only after you have spoken with a qualified lender.
Ultimately youíre the only one who can determine what you can
realistically afford. You need to do your homework about first time home
buyer loans and find out the maximum mortgage you qualify for and then
give some thought as to whether it falls within your personal comfort
A potential lender will run
some numbers for you and come up with a magic number based on the
financial information you supply and your personal credit history.
Although it may be in the ball park of what you can afford, it may prove
to be too much of a financial hardship in the years ahead.
First off, if you currently
rent donít use your monthly rental fees as a comparison. First time
home buyer loans are very different Ė itís like comparing apples
Use your monthly rental costs as a
guideline only. On one hand it would make sense to compare the two but you
also have to consider other factors such as the need to pay extra for
property taxes. In a rental situation such taxes were incorporated in your
rent. Property taxes can vary between a few hundred to a few thousand
dollars per year depending on where you reside.
Furthermore, did your rent
include utilities? If so, you also need to factor in the cost of gas,
electricity, water and garbage in addition to the cost of any home loan.
And what about having enough money you can put aside as an emergency fund
for home repairs and general maintenance? Remember you no longer have a
landlord you can call upon when something needs fixing.
Then thereís mortgage insurance
to consider whenever youíre shopping for a first time home buyer loans.
This is especially important if you have a high debt to income ratio mortgage.
Another good rule of thumb
when shopping for first time home buyer loans is that if your
current rent falls within your comfort level, aim for a slightly lower
monthly mortgage payment.
Exploring your total monthly
debt load as well as your total monthly housing costs is one of the best
ways to figure out what is a realistic mortgage payment.
Your next task is to find a
lender who specializes in first time home buyer loans and who will
offer you the best deal. Again research and comparison is needed. It will
take you some time to investigate both lenders and loan packages. But
itís time well spent. The time you took to investigate the best in first
time home buyer loans could literally save you thousands of dollars
over the course of your mortgage.
The bottom line when
searching for first time home buyer loans is to invest in doing
your homework. Research all your options before you start looking for that