Buying an Apartment

When you are looking at Villawood apartments for sale, there are some things you need to do first.  For most everyone, becoming a homeowner is something they want to do but you want to make sure that it is the right decision.  You also want to make sure that what you buy is what you want.  When you own instead of renting, you are building equity in a property instead of throwing money at a landlord.  You will be able to sell it later if you decide.

Rent or buy

This is one of the bigger decisions you will need to make.  One thing that factors into this decision is the length of time you plan to spend in your apartment.  If you plan to live there for at least five years, you should consider renting.  If the answer is more than five years, buying a unit at Kogarah central apartments would be the wise way to go.

The reason is that a mortgage payment will usually be less than rent but there is more to renting vs buying than the monthly payment.  To be able to purchase an apartment that is for sale, you will need to have money to use as a down payment.  How much this will be will depend on where the apartment is located and the type of mortgage.

If your mortgage will be government-backed insured by the Federal Housing Administration (FHA) the down payment is usually at least 3.5% of what you are paying for it.  If you are a veteran, you might be able to get a mortgage with zero down through the Veterans Affairs (VA).  If it is a conventional loan, the down payment is about 20%.

Along with the down payment, there are closing costs.  They include but are not limited to, title insurance, survey of the property, home inspection, and appraisal fee.  How much they will be depends on which Villawood apartments for sale you are looking to purchase.  The closing costs can total a few thousand dollars.

With some mortgages, you may be able to include the closing costs with the mortgage but that will increase your monthly mortgage payments.  You will either need to have the closing costs in cash or added to the mortgage.  You cannot borrow the down payment on a separate loan.

What can you afford to spend?

When looking at Kogarah central apartments, know what you can afford to pay.  It will help you to be able to look at apartments in your price range.  When figuring out this amount, the first thing to do is know your debt-to-income ratio.

To do this, add all your monthly debt payments like loans, child support, alimony, and what your estimated mortgage payment will be.  Divide that by your monthly income to get the percentage you can afford.  For example, if your debts are $2,000 a month with a monthly income of $5,000 your debt-to-income ratio is 40%.  The higher the percentage, the tougher it will be to get a mortgage.