Things to Consider Before Buying A House

consideringFor many people, buying a home is the single biggest investment they will make in a lifetime.
The so-called "right time” is different for everyone. Before making a decision to buy a home, ask your lender to help you answer the following questions.

Download our First Time Home buyers Seminar (in MS Power Point format)

The first step even before looking for a home or condo to purchase is to be pre qualified for a mortgage.
You will know how much the bank is willing to lend and that gives you the budget for selecting a home you can buy.


Can You Qualify for a Mortgage?
Determine your debt-to-income ratio. If a loan program uses a 28/36 qualifying ratio, it means you are allowed to spend no more than 28% of your gross income on monthly mortgage payments, and no more than 36% on total debt. This includes debt such as car and school loans, credit cards, child support and alimony. If a person earns $60,000 per year, 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.

Use our loan application checklist to get ready to apply.

How Much Home Can You Afford?
Down payments are generally paid in cash, due at closing, and are based on a percentage of the selling price of the home. You can save money - between $20 to more than $100 a month — if you can make a down payment of 20% or more and avoid the cost of mortgage insurance. If you don't have 20% to put down on a home, don't worry. There are many affordable mortgage programs available, including loans that require little or no down payment. In addition, some veterans, active-duty military personnel and reservists are eligible for zero-down-payment programs.

  • 5% down with 3/2 option mortgage requires only 3% of the down payment to be your own funds. The other 2% can come from a gift, grant or down payment assistance program.
  • 3% down mortgage lets you make a low 3% down payment, and your closing costs can come from an approved down payment assistance program.
  • no down payment mortgage offers 100% financing plus up to 3% financing of closing costs for qualified home buyers.


How's Your Credit?
All lenders require a credit report that contains various personal financial data, including loan payment information, bank and credit card accounts and more. If you are interested in obtaining a copy of yours, you can call any one of the many credit bureaus throughout the United States.