You can get a bank to do a pre-qualification for you....

They can help you answer this question:  

How much you can afford in a loan, based on the interest rate now?

  ... and what your long term payments on car, credit card are, etc.

 

Do both prospective borrowers have good credit? 

Then total income of both may be used in qualifying for a loan.

 

They take your gross income per month...

& 28% is the amount that can go for the monthly house payment

(Principal and Interest, 1/12 taxes and 1/12 insurance) 

 

If you choose a loan program that is less than 20% down,

as most people do in buying a first house, then there is a small fee...

(1/2 of 1% of the remaining loan balance divided by 12)

added to this monthly payment amount. 

It is called Mortgage Insurance Premium... It might be about $50/month, say

After your loan balance drops down it does fall off... but in the meantime it ads to the cost of the loan

 

Then figure out what the long term debt is and the monthly payment on that.

 You can not have more than 36-41% of your gross income used for a combination of house payment and other payments together.  That would be the payments that take more than 6 months to pay off... like furniture payment, car/truck payments, credit cards... the student loan payments, too?

 

The lender will also help advise you on how to be in a position to purchase, 

or what plan to work towards.

 

Of course, it helps if all payments are made on time... that is part of your credit history:  

Pay the rent on time;  pay the utilities on time;  don't have any "bounced checks."  

Your lender will be looking at the 'total picture'  Some loan programs are more lenient; however, the terms are not as good.... & you may be limited to a higher than market interest rate, which in itself, limits the amount of loan you qualify for..

 

The  Alaska Housing Finance Corporation "Home Choice Class"  instructor gives students a small paper tablet to write down everything they spend, to then  look back & see what adds up to too much.  The bank doesn't check everything for a borrower... as how much utilities are and how much gas is for driving a distance to and from work.   All these things need to be considered.   

If the bank says you can borrow more than you feel comfortable with, think twice.

 

The benefits of financing a home with AHFC, they emphasize:

• Lower Interest Rates

• Assumable loans

• In-state servicing

• Longer commitment terms

 

  AHFC offers "Home Choice."  

It's a very good home buyer education class and it's free! 

It is repeated regularly and when it comes to town again, plan on taking it!

Contact them 1-800-459-2921 or in Anchorage 330-8489

e-mail register@ahfc.state.ak.us 

www.ahfc.state.ak.us for a complete listing of seminars

Tammie... Thanks for teaching a class in Valdez, April 7 & 8!

Next scheduled in Valdez:  May 7 & 8