HOW YOU CAN AFFORD A HOME
With today's housing prices, you might think you can't afford the house you want. Remember to consider the down payment, mortgage type and other financial obligations before you limit your choices. A good rule to follow is that most people can afford a house costing 2 1/2 time their gross annual income.
WHERE TO FIND THE DOWN PAYMENT
Down payments usually range from 5% to 20% of the purchase price. At least 3% to 5% of this must be your own funds, and cannot be borrowed nor a gift from a relative.
If you do not have enough cash to cover the down paymet, take a look at your other resources. Could you tap into a savings plan at work, or borrow against a retirement account? Would you consider equity sharing, in which a relative puts up part of the down paymt in exchange for a portion of the profits when you decide to sell? Can you borrow from family on a simple interest basis, or take an advance on your bank card credit lines to raise cash? Any of these alternatives can help you achieve the first financial step towards your goal.
IF YOU PLAN TO BUY IN THE FUTURE
Clear up any negative items on your credit report, and pay off as many other debts as possible. Your house payment (mortgage taxes or condo maintenance) plus payment on all other loans, (car, educatin, etc.) shouldn't add up to more than 36% of your gross monthly income.
You might rethink your savings strategy by having all of your money immediately available, instead of holding needed dollars in locked-in accounts like IRA's. Always remember to exhaust every option before limitng your hopes in any way. By using creative borrowing and financial planning...
YOU MIGHT BE ABLE TO AFFORD THAT DREAM HOUSE AFTER ALL!
Contact Direction Mortgage for an appointment or phone consultation regarding your financial readiness to buy a home.