Consider the following before buying a home:

1.      Affordability- examine your finances and make an honest conclusion whether or not you are ready to buy your house with respect to your monetary capacity.  Having a healthy amount of savings and a stable job that yields a steady income should be considered positive indicators.  On the other hand, excessive debt and unpaid outstanding or past due bills are deemed as drawbacks.  You should know exactly whether you can afford paying for mortgage every month.  If you are finding it difficult to make ends meet as it is, perhaps you should reconsider your plan and hold off until your financial well being improves.

2.      Mortgage Rates- depending on the state of your finance, you may be approved for a loan at several possible rates.  Having excellent credit rating will enable you to be granted a loan at a much lower interest rate.  Poor credit history on the other hand can result to either exorbitant rates or non-approval of your mortgage application all together.

3.      Location- If you do get approved for mortgage, you should scope out the area in which you want to buy your dream house.  Pick a location that is safe and near to all necessities.

When the amount of a debt is more than the property that secured that debt is worth, it creates a negative equity situation. This situation in turn can make it very hard, or impossible to refinance your home to take advantage of lower interest rates or lower payments.

If you’re in debt only around 5 percent more than what your home is appraised for, you might be able to find a lender that will refinance the mortgage. But, if you have a severely negative home equity, you’ll be hard pressed to find anyone that will approve a loan.

If you’ve found yourself in this situation, short of walking away from your home and your mortgage obligation, there’s very little that you can do. If at all possible keep up with your payments to keep from losing your home and your investment. If you can’t make the payments, try to renegotiate with your lending institution for a modified loan.