How Much Home Loan Can I Afford?

Have you ever asked yourself how much home loan can I afford? If you know how much of a payment you qualify for before shopping for a home, your purchase will go much smoother and it can save you a lot of headaches.

How would you like to find the perfect place to live then not know if you can qualify for the loan? Long before you even start looking for your home, you need to know how much home loan you can afford.

Many factors are involved to qualify for a loan. Each lender has different guidelines and there are a multitude of different types of mortgage loans.

Jumbo mortgage loans will be harder to qualify for than a conforming mortgage loan. Other factors like down payment, loan amount and what is considered a good credit score will also make a difference.

There are some general guidelines lenders use that will help answer your question, how much home loan can I afford? These are only rough estimates, but you can get a good idea if you will qualify for a home loan and how much of a monthly payment you can afford.

1. Your mortgage payment, taxes, home owners insurance and any other fixed housing expense should be between 25% and 28% of your total gross (before taxes) monthly household income.

2. Your monthly housing costs (the total figure above) plus any other long term debt (monthly expenses extending longer than 11 months) such as car or boat loans, credit cards or installment loans should not exceed more than 40% of your gross (before taxes) monthly household income.

These figures can get higher if you have a higher credit score because you are a better risk to a lender and are more likely to pass their home loan guidelines.

What is considered a good credit score to a lender usually starts with a score of 680 and above. Lenders vary but a 680 score and above means you will likely get the very best interest rates and terms on your loan.

Lenders use the three major credit bureaus; Experian, Trans Union and Equifax to get an average credit score for you. It's a good idea to check your credit reports from all three major credit bureaus before you qualify for a home loan.

That way if you find any mistakes, you can clear them up before a lender sees your credit report. Once you get your credit report check carefully to see that everything is accurate.

If you find any errors, dispute it immediately with the three major credit bureaus. It takes time to get the errors off of your credit report. If you have a clear credit report before you apply for a loan you are more likely to have a pleasant experience instead of a nightmare.

The best way to know if you will qualify for a home loan is talk with a mortgage professional. This is what they are trained to do and they can give you much more accurate figures so there are no surprises when you go to make an offer.

So now when you are ready to qualify for a loan you'll know exactly how much home loan you can afford.

Copyright © 2005 Credit Repair Facts.com All Rights Reserved.

This article is supplied by http://www.credit-repair-facts.com where you will find credit information, debt elimination programs and informative facts that give you the knowledge to correct your own credit and credit report. For more credit related articles like these go to: http://www.credit-repair-facts.com/article s_1.html

In The News:


pen paper and inkwell


cat break through


VA Loans, A Gift from Uncle Sam

Uncle Sam has a gift for the men and women... Read More

Home Equity Increases $1 Trillion in Five Years ? Is the Market Peaking?

A new survey reveals that in the last five years,... Read More

Mortgage After Bankruptcy

Most people probably assume that obtaining a mortgage to purchase... Read More

Are You Ready for a Home Mortgage Loan?

Buying a Home and committing to a Mortgage can be... Read More

Bankruptcy and Buying a Home

Filing bankruptcy is a stressful time in a person's life.... Read More

How Homeowner Can Save Their Home From Foreclosure

Drive around and see how many signs you see that... Read More

Reverse Mortgage Offers Fresh Approach To Income From Real Estate

If you owe 40 percent or less of your original... Read More

Good FICO Credit Score? Tips to Getting the Most Out of Your Home Mortgage Loan With Good Credit

Sometimes so much is talked about how to solve the... Read More

How To Find A Mortgage With Bad Credit

Shopping online for mortgages ought to be trouble free, even... Read More

Composite Credit Report Score Simplifies Mortgage Issues

Do you want a mortgage loan for your new home?... Read More

The Top 5 Things You Must Know Before Applying for a Mortgage

You've been thinking about buying your own home for quite... Read More

Consolidate Debt With A Home Equity Loan

If you are a home owner who is having to... Read More

Bad Credit Mortgage Loans ? How To Get Approved

Persistence is the key working toward getting approved for a... Read More

Refinancing Your Home Mortgage - Get Up To 125% Cash From Your Homes Value

With the low interest rates being offered by lenders today,... Read More

Home Mortgage Loan Information - Which Type of Home Loan is Best For You?

If you are considering buying a home, then you may... Read More

Thought Fixed Rate Will Give You a Respite from the Perils of Variable Rates! Think Again

Slight increases in the interest rates raise your hackles. Tension... Read More

Homeowner Loans ? Drawing Lessons of the Past

Loans are not of a recent origin. People used to... Read More

Option ARM Mortgage Loan - Is This Really for You?

What happened to the days of a 15 or 30... Read More

Flexible Mortgage Tips

Outlined below are some useful flexible mortgage tips. The most... Read More

Helpful Mortgage Advice

Mortgage advice overwhelming you? Many people get advice from everyone... Read More

Student Home Purchase Plan

Tuition costs are climbing, housing costs are climbing, it seems... Read More

Which is Better? Fixed-Rate or Adjustable-Rate Mortgages

The answer depends on several factors including your financial situation.... Read More

A Guide to the Best Remortgage Deals

Finding the best remortgage deals isn't always easy, especially with... Read More

Home Equity ? Is it Time to Cash Out and Move?

During the last five years, home prices have increased nationwide.... Read More

Bridging Loan Basics

A Bridging Loan is a short-term loan used as a... Read More

Understanding UK Bridging Finance

Bridging finance, also referred to as "bridge loans" and "bridging... Read More

What is a Capped Mortgage?

A capped mortgage is a variable rate mortgage with a... Read More

How to Get a Cheap Homeowner Loan

If you're looking for a cheap homeowner loan, you might... Read More

Bad Credit Refinance Loans - Finding a Good Lender

Finding a good lender to help you with refinancing your... Read More

Consolidate Your Debt With a Home Equity Loan and Improve Your Credit Score

A home equity loan is a loan based on the... Read More

Why Choose a Remortgage?

A remortgage can be used for the purpose of gaining... Read More

Mortgage Reduction Solutions

USA ECONOMIC CONDITIONSToday's sluggish economy has left millions of people... Read More

Bad Credit Mortgage Loans Online - How Your FICO Credit Score Can Affect Your Loan Approval

When applying for a mortgage loan when you have a... Read More