FIRST THINGS FIRST - KNOW WHAT YOU CAN AFFORDYou can save yourself a lot of time and trouble if you take a few minutes to figure out a loan amount you can afford. The general guidelines are:
- No more than 28 percent of your gross monthly income should be spent on housing expenses (prinicipal, interest, insurance and taxes). This can vary upwards if you have a good credit history, liquid assets, or if you are already spending more than 28 percent on your housing expenses.
- Your total debt (mortgage and consumer debt) shouldn't exceed 36 percent of gross monthly income. Again, people with good credit and liquid assets can often creep above this line.
As you compare your income to your potentiel housing expenses, keep in mind that your mortgage principal and interest are not your only costs. You will also have to allow for any association fees, property taxes, insurance payments, etc.
There are many loan programs out there, especially for first time home buyers. For your own safety and confidence down the road, your best bet is to adhere as closely as possible to the guidelines above
Bryan VogtStrano & Associates, Realtors® - GMAC Real Estate
(618) 355-5824
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# posted by
Bryan Vogt @ 2:10 PM