I’m sure you’ve heard the questions many times before, or maybe you are the one asking, “Can I afford a house”.

Down Payment
The amount of funds that you will need upfront will depend on a number of things; type of loan, credit, DTI (which we’ll discuss later), loan-to-value and more. Lenders offer minimum down payment guidelines that generally fluxuate depending on the loan program. Usually, the less money down, the riskier the loan and the higher the interest rate. Also, many low down payment loans require good credit scores.

Debt-to-Income Ratio (aka DTI)
DTI is the percentage of your monthly gross income that goes toward paying debts. There are 2 types of DTI:

1. The first DTI, known as the front-end ratio or top ratio, indicates the percentage of income that goes toward housing costs, which for renters is the rent amount and for homeowners is PITI (principal, interest, tax & insurance). PITI may also include mortgage insurance premium (when applicable) and homeowners’ association dues (when applicable).
2. The second DTI, known as the back-end ratio or bottom ratio, indicates the percentage of income that goes toward paying all recurring debt payments, including those covered by the first DTI, as well as other debts such as credit card payments, car loan payments, student loan payments, child support payments, alimony payments, and legal judgments.

So when you’re asking yourself , “Can I afford a house” or more specifically, “How can I afford a house”, you need to factor your total debts into determining an affordable monthly mortgage payment. Mortgage lenders look at whether your total debt is larger than 30-40% of your monthly gross income. Remember, debt is not just credit cards and student loans. It can also include alimony, child support, car loans, and housing expenses.

Can I Afford a House

bank of america short saleclick to enlarge

Is your Home Now Worth Less than you Owe on the Loan?

• Do you Fear Losing Your Home to Foreclosure?

• Is your Loan with Bank of America?

If you answered yes to any of these questions, have you considered a short sale? A short sale may be the likeliest solution for you; most experts are saying it is the smart way to settle your mortgage debt. Are you aware that you can avoid foreclosure by starting the Bank of America short sale process online (often referred to as boa short sale)? Simply visit the “Bank of America Short Sale Processing System”, create a profile, answer a few questions and select an approved Bank of America short sale Realtor?  Be certain the Realtor you select has the essential experience closing short sales and is well versed in Equator Agent Workstation.

Upon approval of your short sale, you will be able to sell your home for less than the total amount that you owe. The Bank of America short sale processing system has literally revolutionized the short sales industry.

If you would like more information about how the Bank of America short sale process can work for you, or if you have a general question for a short sale specialist, please leave a comment or enter your contact information to the right and you will be contacted by a specialist within 24 hours or simply. For immediate assistance call (408) 757-463TWO

Real Estate Career
Heath Dixon is a real estate broker offering a unique opportunity to real estate agents and those looking to start a real estate career. Experience the tremendous growth potential that One World Estates and Dixon Financial is offering.

If you’re looking to buy, sell, refinance or explore the opportunity to start a real estate career, wait no longer… click here to get started.

The Welcome Home Loan Assistance Program offers a loan up to $25,000 for down payment assistance at 3% simple interest for low income first-time homebuyers.

City loan applicants may receive assistance from multiple City programs; however, the total amount of City funded down payment assistance may not exceed $100,000 per unit.

For more information about the program, contact Heath Dixon: (408) 757-463TWO