|
|
YOUR BUYING POWER
HOW MUCH HOUSE CAN I AFFORD?
Before You Look at Your First House
Experienced home buyers know that one of the first-steps in beginning a successful search for a new house is taking a hard, objective look at finances. Determining how much money you can dedicate to the purchase of your new house affects almost every aspect of buying a new home - including how we write the offer, which mortgage programs you will qualify for, shopping for the best mortgage loan and which homes are truly in your price range. When working as your Realtor®, I usually ask the following questions and work closely with your lender to help you understand your loan and obligations - But, even if no one else asks...You need to ask yourself these questions and make sure you understand your loan.
|
Here are a few of the questions that each home buyer should ask:
-
How much cash do I have available for a down payment? Will I be using my own money....or Cash gift from a relative? The amount you have available for a down payment will affect what types of loans for which you can qualify. The source of your funds affects the type of loan you qualify for. Learn more.
- Am I ready to write a check for the earnest money? Earnest money is a cash deposit made to a home seller to secure an offer to buy the property. This amount is sometimes forfeited if the buyer decides to withdraw his offer. That's something I can counsel you about.
- How much additional cash will be available to pay for closing costs? There are certain standard costs associated with closing the sale of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract. Learn more.
- What is the maximum monthly mortgage payment that I can afford? Most lenders will use the 28/36 rule to determine the maximum mortgage payment you can afford. But many 1st time buyer programs are more flexible.
- Is 100% Financing still available?
- Can I qualify for a better interest rate if I raise my fico score? What steps can I take to raise my fico score?
|
The 28/36 Rule
No more than 28% of your gross income can be applied to your mortgage, real estate taxes and insurance. And no more than 36% of your gross income can be applied to your mortgage expenses plus your regular debt expenses (car payments, credit cards, other loans, etc.).
First Time buyers
There are many programs to specifically help 1st time buyers with flexibility on ratios, fico scores and even downpayment and reduced interest rates. There are even special programs for Veterans, Teachers, Public Service Employees and many other groups. Some cities and counties have limited funds available for downpayment assistance. I can help determine whether you qualify for any of these special programs and then guide you through the process. No need to walk alone down the path to home ownership.
"Wendy" Benavides, Realtor
RE/MAX Executive
Call Direct: (209)239-1985 or (925)784-4062
|
 |
|
|
|
|
