Can I Be A Home Owner?

One of the most important steps in evaluating your potential home purchase is your personal financial assessment.

1)    How Much Can I Afford?  

Determining your ability to comfortably pay monthly mortgage payments is something for which lenders will use established guidelines. A general rule is that a household's mortgage payment should not exceed 36 percent of its income on all its debt, which includes the monthly mortgage payment; and that the mortgage itself should not exceed 28 percent of the household income.

Remember, if you are purchasing a home with a spouse or other partner, you can include that person's income (and, of course, consider his or her debts) when computing the cost of the home you can afford. Mortgage Calculators can be great tools when making these calculations.

Click Here to Calculate a Mortgage

This mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home's sale price, the term of the loan desired, buyer's down payment percentage, and the loan's interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.

2)    What are the Costs of Owning a Home

You should not purchase a home unless you feel comfortable that you can make the (Mortgage payments link) and be able to pay for other housing-related costs. These include upfront costs and ongoing costs.

Ongoing costs include your utilities, mortgage payment, property taxes, (homeowner’s insurance link), maintenance and other expenses. (Mortgage insurance link) may also be required depending on the amount of your down payment.

Some additional housing costs to keep in mind when calculating moving expenses are furniture, appliances, lawn and garden equipment, or any repair work that may need to be done before you move in.

Upfront purchase costs include the (down payment link) related to (closing link) settling-in. You may qualify for assistance to cover some of your closing costs. Other programs may help you with your down payment or provide other assistance that will help you purchase a home. Click here to start your search for a Home Buyer Program that fits you.

3)    Find a Homebuyer program

KCHomePrograms was created to make buyers aware of home purchase programs. Many of these programs are available to individuals or households whose income is below a certain amount.

Click here to view programs -Access the Down Payment Resource search to help you purchase a home in the area where you would like to live.

4)   Get pre-qualified for a loan

The first step you may take is to get pre-approved for a mortgage loan. That means that your loan application has actually been processed by a lender, and a specific mortgage amount has been approved for you. Some buyers feel they have more negotiating power when they can provide this pre-approval proof to the seller. As with pre-qualification, lenders will use established guidelines to determine the size of your loan approval.