Mortgage Garden Nursery Landscaping Guide
An Affordable Mortgage
By James R Blunt
Some people search for homes hastily, without any regard for
their credit scores, but this is a big mistake! They think, "If
I have the money and the desire to find a new home, who cares
if I missed a few credit card payments or defaulted in the past?"
In fact, it doesn’t seem like a huge difference at first,
like paying $1,543/month or $1,841/month. It’s just a couple hundred
dollars, right? Yet, over the course of 30 years, you could either
pay $555,480 or $662,760 for a $300,000 house. So it’s your choice.
Who wouldn’t want to save over $100,000 on their mortgage simply
by taking a few extra months to improve their credit score?
Knowing How Much You Can Afford
The first step to getting a good mortgage is to figure out how
much house you can afford. Many Americans are suffering foreclosures
now because they simply over-purchased.
Some thought they were getting a great deal with an interest
only or adjustable rate mortgage, while others encountered generous,
even desperate, lenders who wanted to move more products in an
over-inflated market. As a general rule, you can take your annual
income, multiply it by 0.28 and divide by 12 for your monthly
housing budget.
Factor In All Your Other Debts
You may even want to factor in some of your other debt obligations.
You should never be paying more than 36% of your annual income
on alimony, auto loans, mortgages, credit cards and other debts.
To determine your monthly debt allowance, multiply your annual
salary by 0.36 and divide by 12. For example, if you make $40,000/year,
you can afford $933/month real estate or $1,200 of total debt
obligations.
Save Money For A Down Payment
Next, you’ll want to make sure you’ve saved enough money for
a down payment. For the most lenient loans today (like "conforming
loans" offered by Fannie and Freddie), you will need 10%
of the house price saved (so $10,000 on a $100,000 house), plus
closing costs, which could easily be another $5,000.
However, to ensure the best mortgage deal, you will have saved
20% to 25% (so $20,000 to $25,000 on a $100,000 house). If you
put down less than 20%, lenders will often require you to purchase
private mortgage insurance, which will add to the unanticipated
costs of home ownership.
Saving Money In A Separate Account
To save money, you should review your options and calculate how
much you need to save, set up a separate account (or even an automatic
account so you won’t be tempted to spend) and give yourself a
reasonable timeframe (1 to 2 years).
You’ll be surprised how much you can save once you have a plan
in place! Realtors often recommend locking chunks of money into
6 to 12 month bank CDs, where you will earn interest as your money
sits.
Gaining Bank Approval For A Mortgage
To gain approval for a mortgage, you will need an arsenal of
paperwork. Organize recent pay stubs for the past year, tax returns
for the past three years, financial statements from your bank
that are relevant to the past 60 days, copies of monthly debt
payments and additional proof of income that may help bankers
evaluate your creditworthiness.
You can even write letters explaining your financial situation
to show greater stability. Remember that home ownership is more
of a privilege than a right and to earn that privilege, you must
prove you are worthy.
About the Author:
James R Blunt has written a number of articles on real estate, house plans,
architecture and home improvement including
Bathroom Tile Designs,
Interior Design,
Traditional House Plans,
Design Development,
Architectural Services,
Architecture.
Keep a lookout for more of his articles on this website.
Little Known Home Owner Facts....
Owning or building your own home can be a great experience if
you have the right information. You are going to need to secure
the right loan for your needs. You will also need to know how
to hire the right contractor.
If you want to help the environment, you need to have the right
information on how to make your home "green." If you
do not have the right resources directing you, being a home owner
can be a nightmare of paperwork and troubles.
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