The lender is primarily looking at two factors in evaluating your qualification for a home loan.
· The funds you have available for a down payment
· Your continuing income for paying the monthly housing expenses
The lender will want to know if you have cash available for paying the down payment and other up-front closing costs. They are interested in your long-term debt, defined as any debt that will take more than 10 months to pay off.
Lenders look at two ratios of your debt and income. They calculate your percentage of debt by dividing the amount of money you pay each month to creditors by your monthly income. Remember that low ratios do not always lead to approval and high ratios don’t always lead to denials. Other factors such as payment history are evaluated along with the debt ratios.
Bottom line is that you must be comfortable making your monthly payment. Prior to talking with your lender you should review your monthly expenses and income and determine what total monthly payment you are comfortable making. Then, take this number to your lender and they will help you work backwards to come up with a purchase price that supports that monthly payment.
RE/MAX State Line
bradleypapa@remax.net
http://www.papasinthehouse.com/
