Before you start browsing the classifieds and cruising open houses, you need to know how much of a living space you can afford and verify your own mortgage calculator. It is not difficult to do that, regardless of what you might read. How large residential property you can afford depends on how much you can and you want to spend.
The Real Cost of a House
Your home costs more than just the mortgage. The usual down payment in Dubai is between 10 and 20 percent of the assessed value of the residential property. You need to have that up front, as lenders will not cover it. If you don’t have savings, you can opt for a personal loan from another bank.
It is also important to protect your investment with some kind of insurance and this is an additional amount. Various housing fees and taxes also add to the cost of owning a home.
How much you can spend?
How much you can technically spend is not as important as how much you can reasonably afford. While there are different guidelines on how much of your monthly income you should spend, it is totally up to you to determine how much you can comfortably and realistically afford. The figure that you arrive at, is something that you should be prepared to defend to your lender. Once you determine how much you can spend every month, it’s time to determine how much living space you can afford.
Major obstacle: Credit Rating
Your credit rating can wildly impact your monthly mortgage payment. If you have a good history with the lender, the repayment options will be more flexible. However, borrowers with bad history may find difficulties for getting a mortgage.
Mortgage Calculators: How Much Home You Can Afford
Mortgage calculators are available online and ca help you determine how big your mortgage can be, showing you what a monthly payment will look like. Mortgage calculators factor in the value of the home, the amount of the mortgage, how good your credit score is, the loan’s term and interest rate. Mortgage calculators provide you with an assessment of how much a mortgage will cost you every month. Consulting a mortgage calculator allows you to determine whether or not you can afford a home. Once you run the cost of a house or two, you’ll get a clearer idea of your price range.
Of course, there is no reason to buy more living space than you want, even if you can afford it. At the end of the day, money isn’t everything and you might be far happier in a house that is below your maximum limit than you are with the most beautiful house that you can find.
