How long do you plan on staying in the house (or with the loan)?
This may determine what type of loan you should consider. For example, fixed rate versus adjustable rate, or whether you should pay points to “buy down” the interest rate.
What monthly payment can you comfortably afford?
Your Mortgage Loan Officer can work with you to help determine how much fits in your budget. Consider future plans (such as moving from a two income to one income household) that may impact the affordability of your payment.
How much do you have for a down payment?
This is an important question. With a smaller down payment, you may have to pay Private Mortgage Insurance (PMI) - an added expense to consider. You also need to look at whether you will have funds after purchasing the home. When owning a home, it is a good idea to plan ahead and have financial backup should the unexpected occur.
Is paying off the mortgage early important to you?
Everyone is in a different place in their life when they take out a new mortgage loan. Whether you plan to retire in five years or twenty, or you’ll have children down the road, it is important to consider how a mortgage payment factors into these plans.
Is your income likely to remain stable, increase, or decrease over the life of the loan?
This is a significant point to consider. Once you take on a mortgage payment you are committed to paying the loan on time. Income that is expected to change in the future may impact the affordability of your payment.