9 Steps to Buying a Home
Step 1. Figure Out How Much You Can Afford
What you can afford depends on:
- Your income
- Your current monthly expenses
- Your cash available for a down payment and closing costs
- Your credit history
- And the current interest rates
The lender considers your debt to income ratio, which is a comparison of your gross income (your pay before deduction of tax) to your housing and non-housing expenses.
Non-housing expenses include such long term debts as car or student loan payments, alimony, or child support.
According to the FHA (Federal Housing Administration), monthly mortgage payments should be no more than 29% of your monthly gross income (before taxes), while the mortgage payment, combined with non-housing expenses, should total no more than 41% of your income.
Visit a lender to find out how much you can afford and what the current interest rates are. The calculators below can help, but it is best to visit a lender to find out for sure.
For more information visit www.hud.gov/buying/
Mortgage Calculators
Step 1. Figure Out How Much You Can Afford
Step 2. Know Your Rights
Step 3. Shop For A Loan
Step 4. Learn About Homebuying Programs
Step 5. Shop For A Home
Step 6. Make An Offer
Step 7. Get A Home Inspection
Step 8. Shop For Homeowners Insurance
Step 9. Sign Papers
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