We believe it is extremely important that, when evaluating the possibility of purchasing a home, the individual or family has to invest a significant amount of time to prevent such a purchase does not end up becoming the main cause of a future collapse in the stability of their finances.
First things first
Anyone who is considering for purchasing a home should start with these questions: Am I able to pay the cost of a home? Do I really have the financial capacity to assume the commitment that represents a loan?
To begin to answer these questions, we can begin to assess our status. Do I have a steady job now? If I have, what are the prospects in the medium term for the company I work? (Or my company if I have a business).
After confirming that we have a source of continuing job prospects over the medium term, we must assess whether the revenues that we produce in this work are sufficient to adequately cover the monthly mortgage payments. It is worth noting that, generally when we went from being tenants (paying rent) to purchase a home through a mortgage, we may have to assume a higher monthly fee to rent that we paid (even assuming that we are purchasing a home with similar characteristics). Only cases where we have sufficient resources to make a substantial initial payment (of at least 50% of home value), we can expect the loan installment will equal the income we were paying previously.
If this is the case, it is likely to be able to home-ownership. Otherwise, we must assess whether the monthly fee to which we are engaging not represent a heavy burden for our personal finances.
Overall, the monthly expenditure of an average family housing (either rental or loan fee) should not exceed 25%-30% of their monthly income.
Another measurement parameter probably said that the total amount of funding must not exceed two times of the amount of your annual income.
On the other hand, it is important to note that it is always recommended to pay an initial payment of at least 20% of home value.
Other important aspects
Other points to consider of validating that we are able to purchase a home would be:
• Do I have substantial debts to pay at high interest rates and generate a charge on my monthly income?
• After taking the payment of the amount of mortgage loan, will my monthly income saving me continually?
• Do I have a good credit record with financial institutions?
• Do I have all my other expenses under control?
Even if you have a source of stable employment and generating enough income to cover monthly payments on a mortgage loan, prior to purchasing a home, we must ensure that all aspects of our personal financial planning are under control.
We must never forget that the commitment to hire a home can be repaid in a relatively easy, but the cancellation of a mortgage loan requires a much longer process that would involve, at best, selling the property, obtaining and negotiating with a buyer, paying the outstanding balance with the bank and assuming all costs arising from this process.
It is always advisable to take into account all the above factors before deciding to purchase a home. And if you honestly mean unprepared, the recommendation is to be patient. The best option in these cases is to develop a plan that allows you to gradually improve your financial position so that can become homeowners in the medium term without compromising stability.
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