How Much Can You Afford for a Mortgage?
Although interest rates are at an all time high do you have what it takes to succesfully pay down a home? It may seem attractive to buy into the market now while prices are low, which is a very good point.
However, two notes of caution. 1) If you can only afford a mortgage over an extended period of ammortization (loan term is over 25 years), you may not be in the heathiest financial position to own a home. The overall interest you would be paying increases significantly for every year you don't pay off the mortgage.
2) If you barely qualified for a mortgage with interest rates at recording setting lows, consider what will happen tomorrow. Interest rates can only go up at this point (2010) and thus your payments will increase. Even if you're locked into a 5 year fixed-plan, come renewal time ask the question, "will I be able to afford my mortgage?"
What Can You Afford Today?
Now that you have an idea what is the next step? Arm yourself with information on how to shore up your personal finances so you're in a healthy position before embarking on this new and exciting mortgage adventure. Some resources:
Some significant personal financial articles located at DiscussEconomics.
Clarity on debt management issues also available from DiscussEconomics.