Thing to Consider when Buying a Home

Can You Qualify for a Mortgage?Determine your debt-to-income ratio. If a loan program uses a 28/36qualifying ratio, it means you are allowed to spend no more than 28%of your gross income on monthly mortgage payments, and no morethan 36% on total debt. This includes debt such as car and school loans,credit cards, child support and alimony. If a person earns $60,000peryear, their monthly gross income is $5,000. Under the 28/36 guidelines,their maximum monthly mortgage payment should not exceed$1,400, while their total monthly debt should not exceed $1,800.How Much Home Can You Afford?Down payments are generally paid in cash, due at closing, and arebased on a percentage of the selling price of the home. You can savemoney – between $20 to more than $100 a month – if you can make a down payment of 20% or more and avoid the cost of mortgageinsurance. If you don’t have 20% to put down on a home, don’t worry.There are many affordable mortgage programs available, includingloans that require little or no down payment. In addition, some veterans, active-duty military personnel and reservists are eligible for zero-down-payment programs.How’s Your Credit?All lenders require a credit report that contains various personal financial data, including loan payment information, bank and creditcard accounts and more. If you are interested in obtaining a copy ofyours, you can call any one of the many credit bureaus throughout the United States.