| How much housing loan can I afford? What is the | | | | would come handy in the form of lower mortgage |
| maximum amount of repayment per month that I | | | | rate and consequently reduced interest payment. |
| can make? What is the maximum value of the house | | | | Most financial planners would however suggest that |
| that I can purchase? These are a few very related | | | | the monthly repayment should be less than half your |
| and pertinent questions which must be going on in | | | | monthly earnings. They also reckon that one should |
| the mind of every prospective home buyer. The | | | | have adequate savings to take care of loan |
| biggest and the two most influencing factor which | | | | repayment for no less than 6-8 months. Make sure |
| determines the value of the house that you can | | | | your credit card limits are available for you to use |
| afford include the housing loan amount that a | | | | and not reduced by the amount payable. The amount |
| mortgage lender is ready to provide you with and | | | | of loan available to you would be reduced by the |
| your own contribution towards your home purchase | | | | amount of loan that you carry or the outstanding |
| in the form of a down payment. Let us have a look | | | | credit card due. |
| into each of these factors and the manner in which it | | | | The other big factor which determines your |
| influences your budget towards house purchase. | | | | affordability is your net worth and liquidity at the |
| Your credit score is the largest determinant of the | | | | time of buying a house. Besides an amount of ten to |
| amount of exposure that the mortgage lender is | | | | fifteen percent of the value of the house which is |
| willing to take. The other factors based on which the | | | | expected as contribution from your side by the |
| mortgage lender assess the amount of risk they are | | | | lender, you can enhance your budget by increasing |
| willing to take depend upon an individual’s | | | | your own equity in your house. You can certainly plan |
| monthly income, the current debt that one has on his | | | | to enhance your won contribution. Avoid big ticket |
| account, the number of dependants and an | | | | purchases and ensure you increase your monthly |
| estimate of the monthly expenditure that one needs | | | | savings to be ready with a sizeable amount at the |
| to take care of. In case of an above average credit | | | | time of making down payment for your house. It is |
| score, the mortgage lenders would even go up to | | | | important to plan for the purchase of your dream |
| levels of more than 50% of one’s monthly | | | | house. A well planned and thought out exercise would |
| income while calculating the monthly repaying | | | | help you find a better house for yourself. Remember, |
| capacity. By & large the maximum home loan | | | | a house is your biggest asset and would stay with |
| amount that the various mortgage lenders would lend | | | | you for the rest of your life. |
| you would not vary by much. A healthy credit score | | | | |