When you decide to get a mortgage, it is important to create a plan and strategy for managing your mortgage loan. But the question is how do we start on creating our plan and establishing a strategy for managing the debt? The answer is to ask yourself some questions. This will help you jumpstart your decision for getting a mortgage to purchase real property.
Here are a few questions you may want to start with and work from their specific to your actual needs.
- Do I have enough savings?
Wait a minute. If we are getting a mortgage then why are we asking for savings? Getting a mortgage is best when you can pay a high downpayment for the property. It is also important to note that despite of paying a good amount of downpayment, there is still enough left in your savings account to cover for any emergency spending. Remember that being able to pay a good portion of the price upfront will lower the loan amount that you need. A lower loan amount means lower amortizations.
- Do I have the source of income for paying amortizations?
Amortization payments are obligations that need to be fulfilled for a long period of time during a loan term. It is necessary that we can identify a source of income that is expected to last on the duration of the loan to ensure that payments can be made.
- Are there existing or future financial obligations that I need to consider?
When making a loan or applying for a mortgage, it is necessary to make sure that your financial matters are well in place. It means that you have reviewed and identified all your sources of income and financial obligations. Your income should definitely exceed your obligations. If you have an existing loan, make sure that adding a mortgage can be accommodated by your current income. If there is an intent on a future loan, check if will overlap with your mortgage. If yes, identify if your current income can cover all the obligations.