Home Ownership and Mortgage FAQ

• What are the benefits of home ownership?

• Tax deductions
  More stable housing costs
  You control your property
  Building wealth

• How do I figure out how much home I can afford?

• There are two commonly accepted guidelines used by lenders to help determine your ability to make mortgage payments.

  Your monthly housing costs (including mortgage payments, property taxes, homeowner and mortgage insurance, and homeowner's fees) should total no more than 28% of your monthly gross (pre-tax) income. Your income includes regular pay from your job, funds from a part-time or second job; retirement, VA and Social Security benefits; disability; welfare and unemployment benefits; alimony and child support.

  Your monthly housing costs plus other long-term debts such as payments on car loans, student loans or other installment debts (with more than 10 months to repay) should total no more than 36% of your monthly gross income.

  Depending on your income, you may qualify for special loan programs that can enable you to apply for a larger mortgage than you would normally qualify for under these guidelines.

• What's the advantage of being pre-approved?

• Before you begin your home search, it's a great idea to secure pre-approval. It gives you a definite idea of what you can afford. It shows sellers that you are serious about buying. You'll be able to make an offer as soon as you find the right house, which is especially important if you aren't the only interested buyer.

• What do I need to do to start the pre-approved process?

• To begin the pre-approval process, you'll need to assemble the following financial records for your lender:
  Pay stubs for the past 30 days
  W-2 forms for the past 2 years
  Information on long-term debts
  Most recent statement for all retirement accounts
  Bank statements for the past 3 months
  Copy of driver's license, front and back
  Proof of any other income
  Contract of sale