How much house can I afford?
When you're buying a home it is exciting and at the same time become overwhelming, we don't look just at your income, assets, and the down payment you have. We look at all of your liabilities and obligations as well, including auto loans, credit card debt, child support, potential property taxes and insurance, and your overall credit rating.
Know Which Mortgage Option Is Right for You
Depending on your credit score the following is an list of our mortgage options to choose from.
Mortgage Options Available:
- FHA 500-579 FICO 10% Down Payment**
- FHA 580 and up FICO 3.5% Down Payment**
- FHA with W2’s only (exclude 2106 business expenses/Sch. C Losses)
- FHA No FICO Scores 3.5% Down (4 Alternate Lines of Credit Required)
- FHA 620 and up FICO .5% Down payment ( Must Qualify for the 3% Grant)
- VA (Veterans) 500 and up FICO 0% Down **
- USDA 580 with 0% Down Payment **
- ITIN with 10% Down Payment
- Self Employed Bank Statement Loans Down to 580 FICO
- Jumbo Loans Down to 500 FICO
- 30% Down Payment loan with 10% Interest Rate Second Chance Loans **Any lates reported to your credit report in the last 12-24 months will be reviewed on case by case situation with a strong letter of explanation. Further Documentation may be required**
You’re Required Down Payment
Your down payment amount makes a big impact on how much home you can afford. The more cash you put down, the less money you’ll need to finance. The following are some common examples:
- 3% Down Conventional Loans *must income & credit qualify
- 3.5% Down FHA Loans *must credit qualify
- 0% VA Loans *must be a US veteran with qualify documents
- 0% USDA *must income & location of the property qualify
- 5% Down Conventional Loans *must credit qualify
Budgeting for Closing Costs
On average, closing costs are about 4% of the purchase price of your home. We will let you know exactly how much your closing costs are so you can pay for them on closing day. These costs cover important parts of the home-buying process, such as:
- Credit report fees
- Home inspections
- Appraisal fees
- Title company’s fees
- One your upfront Homeowner’s insurance
- Setting up your future Escrow Account for Property Taxes & Insurance
- Other expenses that will be involved in closing your mortgage loan
Get Prequalified for a Mortgage
Getting prequalified takes a little bit of work. We will need to make sure your financial information is accurate and submit your loan for automatic approval (preliminary underwriting), which is just another step in the approval process that determines how much money you can borrow.
Sure, it takes some extra time to get prequalified. But, is worth it when you begin your home search! A prequalification letter shows sellers you’re a serious buyer and that they can sell their house faster if they choose your offer over competing offers that haven’t been qualified to buy.
Make sure that you are comfortable with your monthly payment and that it is aligned with your Home Buying Budget.
Work with a Buyer’s Agent
Though your search for homes may start online, it shouldn’t end there. You can do a lot of research on your own, but you need the help of an expert when it comes to actually finding and securing your perfect home. An experienced real estate agent can help you figure out how much house you can afford and what kind of homes you can expect to find, considering your market and price range. If you are not already working with a Realtor, we can also extend our services as we also have a Real Estate office, Mersaes Real Estate. If you are interested in our services please let us know and Michael or Katherine will reach out to you.
If you have any questions at any time please feel free to email or call us at (972)203-9033.
Thank you and looking forward to working with you.
NYAL Staff