The most common questions I hear from clients is "do I need a down payment?" and "What do I qualify for?" There are still a number of options with Community development grants, Down payment assistance programs, VA, and Rural Housing in certain areas 100% is still possible. Scores are more important, and good credit history is becoming a must, but it doesn't need to be perfect.
The ratios on qualifying for a home are in the lines of 31/43 with the first number being how much of your monthly income is allowed to be used for paying your mortgage and the second number being how much of your monthly income can be used for your TOTAL monthly debt. There is flexibility in the ratios depending credit score, amount of reserves work history, etc that can bring them up to as much as 50%.
The more important question isn't what you qualify for, but rather how much do you feel comfortable paying every month. It amazes me the number of times that the two amounts vary by as much as $600 per month. This is especially important for the first time homebuyer. What you may feel you can afford may be a fixer upper, but think of the equity you will have when you sell it. With the American dream becoming bigger than real life, it is important to keep perspective on having a home you can take the time to enjoy and working to afford the home you qualify for. We're in Utah, a stone's throw from countless national parks, mountain trails, and some of the best powder in the world, it would be a shame to miss all of that. For more information on how to qualify for a home loan or what you may need, please click o the link below.
Karl Menzer
435-849-0212
Karl:
I find that when I ask if the client is comfortable with a payment of XXXX monthly, that seems to make a big difference, then I state if you are comfortable with a payment of this amount --- the price range that we need to be shopping in is. I rather start out with reality then get my clients into a situation that can be a deal killer later, or cost them to be house poor.
Karl
I ask what is your price range and are you pre-qualified, and assume the combination of those two questions have lead them to a comfort level of price.
Hi Karl,
Very nice post, you make a very good point. Have a great week. Michael A. Caruso