Before you start the search for your dream home, decide how much you can reasonably spend. Mortgage lenders will take into consideration all of the following factors:

• Your existing debts
• The amount of your down payment
• Your job stability
• Credit references and,
• Payment history.

How credit agencies rate your credit is usually a large deciding factor for lenders. It’s a good idea to know your credit status before you begin talking to lenders. There are three main credit agencies that you can get reports from, go to my credit reports article to get information on receiving these reports for free.

Lenders usually use the following two qualifying guidelines to decide how big of a loan you can be approved for:

• Your monthly housing expenses - mortgage payment, property taxes, insurance, etc. These expenses should total no more than 28 percent of your monthly gross income.
• Your monthly living expenses and any long-term debts - car and school loan, child support, health insurance, car insurance, and utilities, etc. These expenses should be no more than 36 percent of your monthly gross income.

Copyright © Agent Image 2005

<<Back To Buyers