Information for all Buyers

Everyone knows what means American Dream, but not everybody can count all costs when it comes the time of buying a new house.

Many future buyers occasionally forget the factor of advance payment, possibility of depreciation and the homeowners insurance, and also all the costs, that are associated with transaction closing, purchasing major appliances, moving, landscape, pool and home maintenance, let alone all design accessories and furnishings.

And, continuing to talk about the buying power, you will be interested to hear that to get general idea about it, it’s necessary to multiply the gross annual income by exactly 2.5. For instance, if you have $50,000 of your household income, you will be able to expect a house price about $125,000. So, the actual number may well be more big or less – it depends, of course, of your financial situation, credit history and debts.

Ratio Of Housing Expense

As a your general guide, the monthly payment of mortgage should be smaller than (or the same than) the percent of the your income – less than half of your gross income. Depending of mortgage type that you chose, the percentage are changing. But, how ever, exist mortgage products, that are focused on the only ratio of debt-to-income. If you are interested on this types of products, your lender can give you more information about them.

Debt-to-Income

Your power of buying can be, perhaps, affected by factors like your income, credit history and debt. Your debt, just like car loans and credit card bills, and any other your expenses, how the housing expenses, child support and alimony should not exceed the 30-40% of the gross income.

If I Want Buy House, How Much Money I Need?

The money are necessary for:

1.) The down payment

2.) Closing costs

3.) Other costs related to house: maintenance, mortgage payment and all repair costs

Your Advance Payment

The advance payment is the same that the value percentage of the property. And, depend on the type of selected mortgage, will be determined this percentage. So, depend on the value property, the advance payments range to 20% (from 3%).

Also, if your advance payment is 20% or less, you need to have the PMI – Private Mortgage Insurance.

Closing Costs

The closing costs always include taxes, points, financing costs, title insurance and all items that should be paid. These costs range from 2 to 7% of the total property value. You should receive all data and more information about this from the lender, just after you decided to have a mortgage.