Qualifying:

To qualify for a loan a lender will use ratios. A lender will allow 29% of your income to go towards a house payment, and you can have approximately 10% of other monthly expenses. If you make for example say, $1,000/month, you could qualify for a $290/month house payment and be allotted $100/month for other expenses (credit cards, cars, etc.). Student loans do not count against you if you are still in school and are deferred. If you have the ability to have a qualified co-signer who is related you could make no income at all and still qualify for the loan.

Down Payment:

A typical down payment on a property is 3% of the purchase price. Also, you need to figure another 2% in closing costs associated with getting the loan (appraisal, credit report, etc.). There are a couple of different programs that are out there that loan the money that you need for the down payment at a low interest rate if you fit the guidelines. These programs typically don’t cost anything and are government programs set up to help people get into a home rater then rent. The requirements are simple:

Loan To Own Programs

Borrow 4% Towards Down Payment/Closing Costs At A Low Interest Rate!
1. The buyer needs to have good or no credit, since they are loaning you everything they want to be sure they will get paid back

2. The buyer must attend a class or watch a video (no tests)

3. The buyer on most programs must make less than a certain amount annually based on the household size (normally this would be $24,000 – $29,000 for a 1-2 person household). There are programs that will allow your income to be higher, also if you have a Co-signer, only the occupants income is restricted to the above NOT the Co-signer.

Government Grant Programs

Receive 3% Towards Your Down payment FREE!!
1. The buyer needs to have good or no credit
2. The buyer on most programs must make less than a certain amount annually based on the household size (normally this would be $26,000 – $30,000 for a 1-2 person household). There are programs that will allow your income to be higher, also if you have a Co-signer, only the occupants income is restricted to the above NOT the Co-signer.

Long Term Financing: (Types Of Loans)

Qualification of Property:

For these type of “government backed” loans (FHA, VA, Etc) the property must be built to a certain standard or “code”. This is why a condo works better than a home. Most condos are newer and can easily pass the standard. Not all properties (even condos) will be approved. I will know which ones will work for you!

Buydowns:

This is a powerful tool for those who want to keep their payments low for the first two years. If you are in school and money is tight, or you just want to ease your way into a higher payments the buydowns do the trick. This option will usually save you about a $100/month for the fist year and about $50/month the second year. Since you know when and how much your payment will increase, you are better able to plan ahead and budget accordingly. With most people, a yearly increase of salary or income is expected and can offset the raise in the payments and get you into a property. Call me for more details on this option.

I look forward to working with you!

R. Scott Stone
Principal Broker