Your life is chancing, you are getting older and owning your own house is starting to sound like a realistic plan. Maybe you are considering buying a house, maybe some other type of property. Anyway, you need to know what budget will fit your situation best.
In order to buy a house you will need a mortgage loan. This loan is specifically for property purchases, which means the interest rate is a lot lower compared to other loans. The reason for this is because the loan will be secured by the property itself. Depending on the amount of money that you make, the lender (usually the bank) will provide you with money so you can pay them back while living in your new house. This sum of money we call mortgage.
To make sure you can continue living your live in peace, you need to find the loan with the cheapest rate.
This way you can payback the amount that fits your financieel situation. If you don't, your mortgage can
change your house into a prison.
The amount of money the bank will give you depends on several variable:
-The amount of money you make a year.
-Your other financieel obligations.
-The amount of private money you own.
-Weightier you want to buy by yourself or with a partner.
With this information you can make a calculation to get an impression of your monthly payment. You can use the PMT function on the spreadsheet program on your computer (Excel, Numbers, google spreadsheet) to make it more organized.
First you start by calculation how much percent of your payment you can miss for your monthly mortgage. This amount can go up, once you start earning more.
Are you owning your own business? In that case its a little harder to calculate your mortgage because you don't have a regular income, in most cases the bank will be likely to look at your income over the last three years.
Formula for calculating:
M= P r (1+r)n
(1+r)n - 1
M: Monthly payment
r: Monthly interest rate
n: Number of payments (number of months you will be paying loan)
In order to make sure how much your monthly payment will be, its best to talk with an expert. For your personal situation there can always be exceptions, and rules chanced drastically after the financial crisis. Make sure you inform yourself properly so you won't imprison yourself by buying a house you can't afford.