Buying a Home and Committing to Mortgage Payments can be very scary!
A home mortgage loan is the largest debt that most Americans will take on in their life time. As such, making the decision to take out a mortgage is not one that most first time home buyers take lightly. Not only will your monthly mortgage payments probably be the largest bill that you face each month, but the total amount of debt realized with a home mortgage loan can have a staggering, and sobering effect on the first time home buyer.
I can remember the months leading up to my decision to fill out a mortgage application. I had nightmares about loosing my job, not being able to keep up with my payments and finding myself homeless. And those were on the good nights when I was able to sleep at all! Committing to a Home Mortgage Doesn't Have To Cost You Your Sleep
In hindsight I realize that the fear that I faced when considering a home mortgage loan was irrational and the stress that I put myself under unwarranted. However, at the time, it surely didn't seem that way!
Let's take a closer look at common mortgage fears.
The major fear is that you won't be able to carry the debt responsibility and you will loose your house.
Okay: worse case scenario, you are not able to keep up with the payments, the lender forecloses and you do loose your home. What are you really loosing? Something that you do not have right now anyway! Therefore, even with the worse case scenario, you will not be any worse off than you are right now. Furthermore, it is important to realize that the chances of the lender foreclosing are pretty slim. The lender doesn't really want your home, he wants you to make good on your home mortgage loan, and will usually work with you to make that happen.
You should also remember that the fear of loosing your home is one that you already faced and survived. When you signed your first lease on an apartment you were taking that same chance. If you were not able to pay your rent your landlord would have made you leave your home. Taking out a mortgage can be less scary once you realize that this is a fear you have already faced and conquered.
Some things you should consider are that a mortgage payment is a tax deductible expense when you go to file your Federal Income Tax Forms. Rent is not deductible. That deductible can make a mortgage payment that is several hundred dollars a month more, about the same after taxes are considered. Knowing You Can Afford the Mortgage Will Allay a Lot of Fears
You can lesson the amount of fear that you will experience when you sign on the dotted line of a mortgage application if you are confident that you will be able to handle the monthly payments. Therefore, it is important to take stock of your financial situation before applying for a mortgage.
Sit down with a mortgage banker or a Realtor and honestly discuss your financial situation, this includes your income and your expenses. It only makes sense to determine how much of a home mortgage loan you can comfortably afford, and it is esential to having financial confidence and avoiding common mortgage fears.
Now, quit worrying and go out and look for your new home!
About the author: Mike Cotter has been a professional lender for over 30 years. He began his career in the commercial banking industry in 1972 and steadily progressed to become Vice President of Retail Banking with a major Denver bank. In 1982 he opened his own commercial bank and served as President and CEO for 10 years. In 1992 he left commercial banking for the mortgage banking field. Rocky Mountain Mortgage Rates
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