Did You Know? Considerations for New Home Purchases

There are several factors to consider in determining the affordability of your potential home purchase. The first is, of course, the actual price of the home itself; however you should also consider any repairs needed prior to occupancy, unfinished work still to be done before the home is to your standards and any future improvements that you think will have to be done within the next five years. The second factor to consider is the interest rate charged by the bank. This factor seems to be simple but one must consider whether the loan is a fixed rate mortgage or an adjustable rate mortgage. You must also consider whether or not the bank is going to charge PMI insurance as this adds an additional monthly expense to your potential payment. If the loan is an adjustable mortgage there are several factors to consider including the index, the margin, and the frequency of adjustments. Another affordability factor is your current and future job salary and job security. Are you anticipating any increases in pay, any bonus anticipated, are you going to be receiving commissions. On the other hand you must also take into consideration your long term employment possibilities.

Currently, houses are priced at historic low prices and interest rates are very favorable. This may be a great time for you to purchase the home of your dreams. If it is, please contact one of our qualified loan officers for further information on affordability and for all of your mortgage questions at 763-784-3400 or visit our website at www.contractorscapital.com.