CURRENT BUYER'S MORTGAGE GUIDE

02.26.09

As we head towards March, I thought it would be good to remind potential home buyers what it may take to get a loan. Despite some national news which makes it sound like money is difficult to borrow, money is readily available for credit-worthy buyers.

As has been the case for much of my career in Real Estate, it is still a general "rule of thumb" to plan on your total housing payment being no more than 35% of your GROSS MONTHLY INCOME. Total monthly costs include the principal and interest (P&I), property taxes, insurance, and primary mortgage insurance. The last 4 categories can make up as much as 44%, or more of the P&I payment alone. The key here is having a secure job and not having lots of other debt beyond monthly living costs.

Down payment amounts can range from 0% (CHFA w/DAP or USDA/RD loans with special qualifications), 3.5% (FHA & 203k loans), and between 3-20% for conventional mortgage products. See your mortgage specialist for all the details as there are minimum credit score factors, some income limits, minimum and maximum, etc., to qualify. Also programs do change from time to time.

Unless you are in possession of a large bank account, it is highly desirable to go see a mortgage specialist at a bank, before beginning to look at real estate. Called pre-qualification, it will give you the knowledge of what price you can afford to pay, thereby giving a real estate agent knowledge about what you can really look at, versus dream about!

© 2009 R. Leech features.