Buying A Home With No Money Down Or Bad Credit - PMI Can Make It EasierWritten by Carrie Reeder
Private mortgage insurance is an excellent method for homebuyers who have trouble saving money, are short on money, or have bad credit, to get into a home now. Private mortgage insurance is provided by a third party to protect lender in mortgage contract. This allows you to purchase a home with a much smaller down payment and if you have bad credit. You should note that this service does not protect you as buyer; it protects lenders such as a mortgage broker or a bank.
Private mortgage insurance is of a great value to those people who can afford payments on a home but have not been able to save up usual ten to twenty percent for a down payment. But, using private mortgage insurance you can lower your down payment amount to anywhere between three and five percent. This allows home buyers to move into a home much sooner and save money.
Buying A House? How Much Home Can You Afford?Written by Carrie Reeder
Maybe you’ve heard expert advice that your debt to income ratio shouldn’t be more than 36 percent of your total income. But do you truly know what that means, and how lenders will look at your financial history in order to decide whether or not to extend you a mortgage? If you need help figuring out your debt to income ratio, simply follow guidelines below and soon you’ll know whether or not you’re in a position to apply for a mortgage loan.
Your debt to income ratio is amount of monthly debt you pay out in contrast to how much income you have coming in. Start by figuring easy part—your income. If you are on a structured paycheck, then it will be easy—simply calculate your monthly salary. If you work on a commission or other type of varying income, total your last six month’s earnings and divide by six.
Now you will need to figure your monthly debt. You should total your car payment, credit card payments (use minimum amount payments for this calculation, even if you pay more), any other monthly debt—such as child support payments—along with estimated amount of your new mortgage payment.