So you want to buy your first home but don't know where to start... The first thought that comes to mind for many first time buyers is to jump on the internet and start looking at what's available.
"How much can I afford?"
This is probably the first and most important question you should ask yourself.
"How do I figure that out?"
Call a loan officer is my advice!
"But I don't want to call a loan officer; I heard it could affect my credit!"
If this sounds like you then read on. Loans now days are issued on DTI or Debt to Income Ratios coupled with your Credit Rating.
"What's a DTI?"
Debt to income is exactly that. How much you are obligated to pay divided by how much you bring home pre-tax.
For instance, You make $2,400 per month, but you are obligated to pay $500 per month on minimum balances due on your credit card, car loan, etc. In this situation your DTI would be 500/2400= 20%.
***Only the balanaces reflected on your credit report need be used to figure your DTI: cable bill, gas bill, and electric need not be figured in!***
The next step is a bit more complicated. I am going to adding more to this self-qualifying in the near future so keep in touch....
Friday, March 14, 2008
So you want to buy your first home.... How much can you Afford?
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1 comment:
Thank you for sharing this Q and A post. This is very helpful to all people who want to buy car or condo. And for those who leave in Utah I can recommend you the North Campus Condominiums. They are very willing to help.
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