It is the dream of almost every people to have a home of their own but it remains a dream only to many people in this inflated market. People with more mortgage debts can get negative shocks in affordability while planning to buy a house that he desires. Income shocks also appear as a threat to the buyers who want to purchase a house.
Buying a house might create a financial stretch
The desire of getting a house always is a dream of people. But buying your first house according to the dream might create a stretch in the pocket. There are certain things to figure out before taking a decision of investing in the real estate market or buying a house. In the inflated market the cost of housing is not only the single concern. There are various financial obligations to be fulfilled. Though banks and other financial institutions offer home loan top ups for buying home, but the thing that should be kept in mind is about the repayment of the home loan. Clearing the mortgage should not drain away all your savings for daycare, medications or for after retirement. More mortgages often carry big debts and it creates a tension to the people. Minimum wage employment, inflation and other economic downfall often stops the young buyers to apply for home loans and buy their desired homes.
Some tips on affordability for the first time home buyers
The bank will say many things that you can afford with the house but it will actually look at the means to repay the loan amount you borrow not the ability to balance with the mortgage and other financial obligations. Too big mortgage after buying a house will not let you to save roughly 10 per cent of the gross payoff the home loan.
Not only it affordability stops with the cost of the house but also there lies a huge factor for budgeting the household stuffs. A maintenance cost adds up to the cost and affordability which if roughly estimated appears to be 1 percent of the house cost. Living in a condominium can arise your monthly fees at a rate higher than inflation rate.
Several banks offer schemes of home loan top ups against their older property as security for buying homes. Not a high rise apartment but a small or moderate flat can be desired to buy within the financial limitations and affordability to repay the loan amount.
In conclusion
The weaker economy among the young people mostly has hit hard and it is found through survey that the young people, as well as old people too, are not turning up to buy new homes or are afraid of the repayment of the home loan amount if they decide to buy a home. The home loan top ups are borrower friendly and can be easily sanctioned with proper documentations and often comes with a reasonable interest rate. Availing this home loan one can give shape to the dream of moving into the home of their own.
