Avoid Foreclosure

Remember that after you buy a house you will always have maintenance and utilities so you have to be sure there is money left for these sort of expenses when you are figuring out how much you can afford for a mortgage. This is important to avoid foreclosure. Remember your payment needs to include interest, principal, insurance and taxes. This number should never be higher than 30% of your net income.

So now that you understand there are extra costs then you have to take very careful consideration when deciding if you can or cannot afford a new house. Another way to do a quick calculation is you should never buy a house that is more than 2.5 times your current yearly income. Just because you think you will get a raise doesn’t mean you will so don’t go in and take a loan on assumed money. If you feel buying a house is going to put stress on your financial situation then it’s quite simple. Don’t buy the house.

You want your lender to be your best friend. Not just someone pretending to be your friend but someone you feel really good about. You are going to want to talk to more than one lender to get a feel for the place you want to deal. This is also very important to avoid foreclosure. If you feel like your lender isn’t being upfront with you then how do you know they will be there for you in time of need.

Be sure you go over with your lender about all the hidden costs at the time of signing. There is going to be lawyer fees, transfer fees and all sort of good stuff. Make sure you know right to the penny. This way you are a step ahead in avoiding foreclosure by knowing exactly what things are going to cost you.

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