| Purchase
Whether you are a first time buyer,
looking for a vacation home, or downsizing into something
smaller, purchasing a home is a big commitment. There
are a number of reasons why someone would by a home,
and many of them are emotional Some of the financial
reasons include tax benefits and investment opportunities.
Below are a few things to consider.
How Much House
Can You Afford?
Before you go out shopping for a home, it's a good
idea to pre-qualify
for your mortgage with a lender. This will let you
know how much you can afford and help you determine
what neighborhoods and type of home you and your real
estate agent should search for. Lenders will calculate
how much you can borrow based on a variety of variables,
some are listed below.
Monthly Payments
Many lenders require your total mortgage
payment, including principal, interest, property
taxes and property insurance to be no more than
28% to 33% of your gross monthly income depending
on your down payment.
Debts
Lenders evaluate your estimated mortgage
payment as well as other monthly payments (car loan,
student loan, credit cards), and usually request
that your combined monthly payments be no more than
36% to 38% of your gross monthly income.
Credit Record
Do you have a good credit record? If not,
is there a good explanation for any late or missing
payments listed on your credit report? Check your
credit ratings with one or more of the three big
credit-reporting agencies.
Down Payment
The amount of your down payment is determined by a
number of factors, including the type of loan, the
requirements of the lender and your personal financial
situation. A conventional loan, which is not guaranteed
or insured by the federal government, usually requires
a down payment of 5% to 20%. Some programs, such as
the Federal Housing Administration (FHA) loan program
and Veterans Administration (VA) loan program, provide
loans with low down payment for qualified borrowers.
FHA loans are available to all borrowers, while VA
loans are available only to individuals with appropriate
government service.
Down payment help
You can also use gifts and grants from parents, friends,
community groups and others for your down payment.
To satisfy lender requirements, the donor will be
asked to supply a gift letter showing that there is
no expectation of repayment. We have plenty of information
on how to obtain down payment assistance should you
need it.
How We Can Help
Speaking with a Palladium representative is the first
step. Even if you're unsure of your credit, have little
or nothing to put down, or know you have some late payments,
you should consider contacting us. Even if you can't
get a loan today we can assist you in taking measurable
steps in improving your financial status. Click
here to contact us.
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