A mortgage is likely to be the largest loan that anyone will ever take in their lifetime. Since mortgage terms can last for as long as 30 years, it makes sense to find a mortgage that is affordable and that can be comfortably serviced throughout the term of the loan.
There is no need to feel that you have little control over the affordability of a mortgage. On the contrary, there are certain things you can do to ensure that you can obtain a mortgage that is affordable for you. Here are some things you should bear in mind when seeking an affordable mortgage:
- Don’t try to keep up with the Joneses – Not because your friends are taking out $500,000 mortgages, it doesn’t mean that you should try to get an affordable mortgage in that price range. Be realistic about your earnings and how much you can comfortably afford to pay on a monthly basis. Use a mortgage calculator to help you determine how much you can comfortably afford. You don’t want to ever face foreclosure.
- Make a Larger Down Payment – The larger your down payment is, the lower your monthly mortgage payments will be and in some cases, you will also be offered lower rates of interest on your loan.
- Aim for a Good to Excellent Credit Score – The higher your credit score is, the better mortgage terms you will be offered. Even a few points off the interest rate can make a huge difference in the amount of interest paid over the life of the mortgage. It all adds up.
- Shop Around for the Best Terms – Even if you don’t qualify for the lowest rates of interest, shop around to find lenders who offer the better overall mortgage terms.