Do You Know How Much Home You Can Afford?

Plain and simple: the most important first step in purchasing a home is to know what you can afford.   When determining a comfortable monthly payment you must not only consider your monthly mortgage payment, but also property taxes, insurance and sometimes home owners associations and mortgage insurance.

Experience shows that prospective home buyers often overestimate home affordability and underestimate their ability to purchase a home, especially given current interest rates that are at historic lows.

I started this service because many consumers think it is necessary to have tens of thousands of dollars to buy a home these days.  Some people never pursue the dream of purchasing a home because they don’t think they have enough money for a down-payment.  Meanwhile they continue to pay someone else’s mortgage for years on end without actually gaining any equity themselves.

How Much Money Do You Need for a Down Payment?

You may have spoken with Realtors, Lenders or Friends in the past who have told you that you need 10% or 20% of the purchase price to even think about buying.

What you may not know is that there are federally insured home loan programs that allow you to purchase a home for as little as 3.5% down and permit the seller to contribute up to 3% toward your closing costs.  To qualify for these programs you must have at least 2 years of continuous work history, decent credit and access to at least 3.5% of the purchase price.  However, that money can come from any number of places.  10 ways to obtain down payment money.

How to Become a Qualified Home Buyer

I cannot stress to you how important it is to arm yourself with a solid pre-qualification prior to starting your home search in any detail.  In fact, most sellers wont even consider your offer unless you also submit a firm pre-qualification letter from a lender.

If you have already contacted a Mortgage Professional or plan to do so in the future, be sure to ask them these 4 Important Questions.

Even if you aren’t in the market to purchase ‘right now,’ it may be wise to fill out a loan application so that your lender can pin point the specific things you can do to improve your credit score.  Experience shows that the difference of 10-20 points on your credit score can greatly alter your overall interest rate which will in turn effect your monthly payment.

You will need to provide a variety of information to the lender for loan approval.  The loan officer will give you a detailed list of exactly what he/she will need from you.   However, as a rule of thumb, its a good idea to begin to locate and organize these documents for quicker loan approval.

I’d imagine that you would like a detailed custom report that shows you the very best home loans for your financial goals.  I have a great relationship with a responsible lender who can work to find you the very best loan program to meet your specific needs.  There is no cost or obligation to get started.  All you have to do is leave your contact information below and Ill take care of the rest.