| Knowing your borrowing power can help you invest in | | | | home. Then after you rent it out you can start looking |
| real estate because it will show you the amount you're | | | | for another home. After about 6 months you can use |
| allowed to borrow with the bank. The bank figures out | | | | the rent as income with the bank on your next home. |
| what you can afford per month and then calculates | | | | Any interest calculator will help you realize how much |
| the amount of a mortgage based on that monthly | | | | you can afford each month and help you figure out |
| amount. | | | | your borrowing power. |
| If you use a mortgage calculator to figure out a | | | | I recommend getting a fixed interest rate instead of an |
| monthly payment that you can afford then it's one | | | | ARM rate because in this economy interest rates can |
| step closer to buying a second home. Makes sure you | | | | only go up. You don't want to get stuck in an |
| put in the current interest rate because it will make a | | | | adjustable rate because it will keep going up over the |
| big difference in your monthly mortgage payment. | | | | next few years, just like real estate will. |
| So add up all your bills and weight them against your | | | | Plug in a few different interest rates into a mortgage |
| income to see how much you can borrow. Make sure | | | | calculator to see the difference in the monthly |
| you do the loan term over 30 years because it will be | | | | payment. You'll be surprised how much the rate will |
| the lowest monthly payment. You wont be able to | | | | effect your mortgage. The higher your monthly |
| immediately use the rent as income because the bank | | | | payment is the less you can borrow so you want to |
| needs to see the steady stream of income before | | | | make sure you get the lowest rate to keep your |
| they start weighing it against your debt. | | | | borrowing power up. |
| Put a small down payment down and buy the second | | | | |