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Buying A Home

Before you start looking for a home you should ask yourself a few questions.
Where do you want to live? Do you want to be close to schools, shopping, or work?
What kind of house would you like (need)? Are you looking for a particular style?
How many bedrooms and bathrooms do you want? Do you want a yard? How much house
can you afford? Have you consulted a Realtor® or Mortgage Lender to determine the
size of the mortgage you would qualify for?

Here are a few tips to help you get organized:

  • Pull a credit report on yourself and make sure the information is accurate. If you
    find any errors take steps to correct them immediately.
  • Browse through real estate advertisements in the newspaper and on the web. You’ll
    get a good feel for the types of homes that are on the market and what they cost.
  • Visit open houses on the weekend. It doesn’t cost anything to look, and looking
    at a few different homes might give you ideas for things you’d like in a house
    but haven’t considered.
  • Start saving money – you’ll need to have cash on hand for a down payment and closing
    costs.
  • Don’t incur any additional debt. Pay down your credit cards – and don’t apply for
    any new ones. Don’t make any major purchases on credit – buy the furniture or car
    later.
  • Contact me to help you find your ideal home. If you have access to email, let me set
    up a profile for you in the MLS email system which allows you to receive emails daily of
    any new or changed properties on the market.

How much house can you afford?

Simply put, you can afford a house that costs as much as the largest monthly mortgage
payment you qualify for. A quick way to estimate the size of mortgage you qualify
for is to take your gross monthly income (that’s before taxes and other deductions)
and multiply it by .28. This works out to just over 1/4 of your gross income.

Mortgage
companies use something called “qualifying ratios” to determine how much
they’ll lend you. Most mortgage companies use either a 28/36 ratio or a 25/33 ratio.
The first number in each pair is the percentage of your gross income that the lender
would consider acceptable as a monthly mortgage payment (i.e. if you make $3,000
per month, 28% of that is $840 per month). The second number in each pair is used
when all debt payments are considered, not just the mortgage. (i.e. if you make
$3,000 per month, but also have a $250 a month car payment, 36% of $3,000 is $1,080,
minus the $250 car payment equals $830). As you can see, in this example the numbers
work out to be almost the same. Obviously if you have more debt you would qualify
for less. Get an idea about what you qualify for using this .

Published in Buying, Featured

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