| Q: |
How much house should I buy? How much can I afford? |
| A: |
The answer to this has a lot to do with your income and the amount of your debt load. As a rough rule of thumb, most home buyers purchase houses that cost between 1½ and 2½ times their annual income. For example, a home buyer earning $40,000 per year would buy houses costing between $60,000 and $100,000. There is, however, a degree of variation due to the individual market prices of the area in which you are interested. In some areas, there may not be houses available within that range, so you may need to spend a bit more. In general, your total debt payments (car payments, credit card payments, etc. plus the monthly mortgage amount) should not exceed approximately 45% of your gross monthly income. These ratios will depend on the type of mortgage for which you are applying.
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| Q: |
How do I know if I am getting a good deal on a mortgage? |
| A: |
In a word: compare. There is a good deal of variation in the mortgage market, not only from week to week, but from lender to lender. Many newspapers list current mortgage rates for your local area in their Real Estate sections, often on Saturday or Sunday. Please contact us for a Loan Shopping Sheet today!
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| Q: |
How much will my closing costs be? |
| A: |
The amount of closing costs will depend on what items are customary for buyers and sellers to pay for in your area. NODA offers loans at a low cost, and closing costs (in most cases) can be rolled into the loan so you won’t have to come to the closing table with money for closing costs.
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| Q: |
What is an appraisal? Will I need one? |
| A: |
An appraisal is an opinion of value of the home you want to purchase. Every lender will require some sort of appraisal before the loan is approved.
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| Q: |
What mortgage options are there for those with poor credit? |
| A: |
There are lenders available for many of those with tarnished credit records. One of the mistakes commonly made by homebuyers involves their credit report. Some buyers assume that their credit is worse than it really is, and that keeps them from securing a more advantageous mortgage. Other buyers are unaware of problems in their credit report, and need to scramble to get the problems handled. You can avoid many of these hassles by getting a copy of your credit report up-front and examining it, both for errors that need to be corrected and accounts that need to be handled. You can get your free credit report at annualcreditreport.com. |
