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Mortgage Memorandum

In: Business and Management

Submitted By justinmzak19
Words 1142
Pages 5
Introduction
Purchasing a home is one of the largest investments one will make in their lifetime. The extreme difficulty to amass enough savings to purchase a home up front causes most people to obtain a mortgage, a loan to finance the purchase of your home. There are various types of mortgages and many pros and cons that come with each. To determine whether or not you are eligible for a mortgage loan, you must consider your credit history, how much money you can put toward a new home, and the new costs that come with owning a home. You also have to consider the principle, the sum of money you borrow to buy your home, the interest on your mortgage payments, property taxes, and homeowner’s insurance. Understanding the financial considerations that go along with buying a home and creating a financial plan prior to your decision is the base for a successful start.

Discussion
The key to successfully buying a home is to determine how much you can afford and starting your research early. I would start by calculating my mortgage limit by finding what the principle, interest, taxes, insurance, as well as my other liabilities to establish a plan and limit on the price I’m willing to pay. I would then determine the area in which I wish to live based on the location of my work, home prices, and housing trends, such as price fluctuations and how long homes have been on the market, in certain areas. I would also have to consider the financial setback buying a house would cause. Not only do most sellers require a twenty percent down payment on the home, there are closing costs, loan fees, title fees, and many other costs that I would have to compensate for. All of those costs require payment before the new bills and taxes that come with owning a home. A financial plan is particularly necessary in this situation. I would make sure I have an ample amount of money saved before…...

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