How To Keep Your Mortgage Payment Real

Posted by on Monday, November 18th, 2013 at 9:01pm.

When you first sit  down to talk to a loans officer about getting your first mortgage, you may be surprised to find that you are offered a higher borrowing amount than you anticipated. After going through the numbers you have discovered on your own that you'll be able to pay a certain amount monthly without having to worry about feeling a tight squeeze. The bank is offering you a mortgage that would require much higher payments and for the life of you, you can't figure out how they ever came up with this number.

The bank doesn't know your lifestyle

You have a certain type of lifestyle set up and you put money away every month to budget for certain things. For example, if you have a little girl and she takes ballet lessons weekly, this can add up to quite a monthly expenditure. If you regularly put money away for a family vacation, the bank has no way of knowing this.

The loans officer is simply taking a look at your disposable income and making a judgment based on that amount. He doesn't  ask questions about personal lifestyle choices. He just looks at the basic amounts that you need for the necessities and the payments that you have to make on your debts.

When you are offered a mortgage amount by the bank, you should never automatically assume that this is amount you can afford to pay every month. It is just a reflection of the amount you could afford if all of your disposable income went towards paying a mortgage. For most people, this is not a reality at all since pretty much all individuals and families do spend some extra money on specialized items that make their lives a little richer and better.

It's up to you to decide how much you can really afford and then stick to it. While the bank can make an estimate, you'll  have the final say in the matter and may probably need to settle for a lower mortgage amount than what you have been offered.

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