A mortgage can be considered as a long term loan designed to help the borrower to purchase a house. In this case the home and the land around it is served as a collateral and besides repaying the principal amount, the borrower has to make interest payments to the lender. Normally everyone who buys a house has a mortgage.

Buying a new home always sounds exciting but many homeowners need to think about the financial responsibilities of homeownership. Although mortgage is certainly considered as the largest and most visible cost associated with a home, one must also be aware of additional expenses that are also involved. Your new home and all major appliances will one day become old. At that time you will one have to occur expenses towards maintenance. Now, if you are a house poor when you take your first mortgage payment, you could then find yourself in a critical situation if your finances did not improve at the time when your home requires major repair work. Heat, light, water sewage, cable television and telephone services are expenses that need to be accountable. You must think about being able to maintain these expenses as they would be constant and unavoidable.

While deciding on a house property purchase, you need to have a good understanding of what your lender thinks you can afford. The lenders make complex calculations in order to have a precise idea of what size of mortgage their clients can handle. Also, besides your finances, you must also evaluate your preferences. Consider the following points for making a calculative decision for yourself. The points are as follows:

• Your income :
  When you decide to pay a mortgage, you must ask several questions to your self such
  as: Are you depending on two incomes to pay the bills? Is your current job stable?
  Also, suppose if you loose your current job then would it be easy to get another job
  that pays the same or more wages.
• Your future expenses:
  You must have already considered your current expenses. But what about your future
  expenses, especially those expenses that you haven’t yet generated. Example expenses
  that will arise in the future, towards your kinds college expense, fulfilling a plan to
  buy a new car or taking your family out for a yearly vacation.
• Lifestyle:
  Are you willing to change your present lifestyle in order to get your dream house.
  Would you mind cutting down on expenses relating to trips to the mall. Can you
  leave without your special morning cappuccino. Depending upon how much you
  can adjust to your present lifestyle, you will have to take a more conservative
  approach to that mortgage payment.
• Mostly people have to consider well enough about the cost of a home which
  can be considered as the single largest personal expense that most people have
  to face. So, before heading towards a debt, one must do proper calculations of
  various expenses that will come along with the purchase of a home. You must
  consider your personal situation, and think about your present lifestyle and also
  your lifestyle that you would wish to follow in the future. You must purchase a
  home only after you are sure that you can afford to buy one without
  compromising your future.