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Spring Means Home Buying Heats Up
Posted on March 12th, 2012 By: Alison
The housing market should heat up with the arrival of spring, according to experts. Buying a home is one of the biggest financial decisions a person can make in their lifetime so it’s important to make the best decision possible for your situation. “The first step is figuring out how much you can afford to spend on homeownership, which means an honest assessment of the household balance sheet,” said Kevin Christopher, Director of Mortgage Sales, BMO Harris Bank in a news release. “Once you have a clear idea of where you stand financially, you can then make a responsible decision of what you can afford, including your down payment, monthly mortgage costs and other expenses like utility costs and property taxes.”
So if you’re considering buying a new home it’s important to consider these tips:
Find out how much you can buy. “First of all, housing costs, including mortgage payments, property insurance and taxes, should not take up more than one-third of your income,” says Christopher. “In addition to this, servicing your overall debt, including loans, utilities, credit card payments and lines of credit, should not account for more than 40 percent. If you can land safely within these parameters, then homeownership is an affordable and realistic option.”
Establish your down payment. The larger down payment you can establish, the less you will pay in interest over the life of the loan. It will also help make the process more affordable.
Research your mortgage options. There are many options and one size does not fit all homeowners. For instance you can decide between the length of the loan, whether you want fixed or variable interest rates and the size of your monthly payment.
Get pre-approved for your mortgage. This will help you shop for homes within your budget. It will also protect you from rate changes and help you to move quickly when you do find the right home.