Buying A House? How Much Home Can You Afford?

Written by Carrie Reeder

Maybe you’ve heardrepparttar 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 followrepparttar 147787 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 isrepparttar 147788 amount of monthly debt you pay out in contrast to how much income you have coming in. Start by figuringrepparttar 147789 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 (userepparttar 147790 minimum amount payments for this calculation, even if you pay more), any other monthly debt—such as child support payments—along withrepparttar 147791 estimated amount of your new mortgage payment.

Buying A Home With Bad Credit - Tips On Finding The Right Broker Or Lender

Written by Carrie Reeder

You can buy a home with a bad credit record; you just need to findrepparttar right mortgage financing package. Before you sign up withrepparttar 147786 first company that offers you a loan, remember to research offers to be assured you are getting a fair deal.

Know Your Credit Rating

Your credit score is one ofrepparttar 147787 biggest factors in determiningrepparttar 147788 points you will pay for your loan. People with scores between 620 and 800 have near perfect credit and will haverepparttar 147789 lowest rates and fees. Scores between 620 and 550 mean an interest rate or two higher. 600 is usuallyrepparttar 147790 cutoff point for 100% financing. Scores less than 550 mean mortgage interest rates are up to 5% higher with up to five points. Lenders will also require a down payment between 5% and 20%

You can find your score online along with your credit report. This is a good time to make sure allrepparttar 147791 information is correct on your record. Any discrepancies should be checked out and corrected before applying for a loan.

Know The Fees

Arm yourself with information so you will know what are reasonable fees for your type of loan. Mortgage brokers are paid for their work through points paid up front or throughrepparttar 147792 lifetime ofrepparttar 147793 loan byrepparttar 147794 lender. Lenders also make money through points.

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