Home Apply Contact Home Equity Loans Challenged Credit Programs First Time Homebuyers
Planning For Home Ownership
We Appreciate Your Business!    
Business News From The Motley Fool
We realize that the phrase "American Dream" conjures up different images for different people. Some see themselves driving the open lane for a slam dunk. . . To others, the American Dream is to hit the lucky number on Friday afternoon and spend the rest of their life in a perpetual state of "weekend". 

Now let's get real. If you don't fall into one of the groups mentioned above, you may need to have a backup plan, a backup dream if you will. Home ownership has long been touted as the American Dream and for good reason. (More than six of ten American families live in homes they own.) With proper planning and discipline, it can be very attainable and do wonders for your quality of life. 

Rent or Buy?

Good question. Buying a home has many distinct advantages over renting. Here's just a few of the things you can do as a homeowner: 

1.) Take that tax deduction. This is probably the sweetest part of home ownership. The mortgage interest you pay on your home is tax deductible. And when you consider that you can often finance a home for about the same amount per month, you actually come out ahead with ownership. Other expenses you may be able to deduct as a homeowner are points (fees charged by the lender), a partial chunk of the closing costs and real estate property taxes. 

2.) Don't forget the added benefit of home equity. By investing in your home, you are actually taking part in an appreciable investment in which you build equity. In time, this equity can help you finance other major purchases, such as a college education or a new car. 

3.) Live the way you want to. You can customize your home the way you want to. If you need to modify a room into an art studio or would like to try some funky wallpaper, it's your call, No need to worry about how to get around the landlord's rules. Many home improvements will actually add to your home's value. And your home improvement costs may be used to reduce your tax when you sell. 

First Things First 

Before you go very far in your quest for a new home, you'll want to start off with a firm knowledge of how much home you can really afford. As a general rule- of-thumb, you can probably afford a house that costs up to two and one half times your annual gross income (that's before taxes). And if you are buying with a spouse or roommate, you can add in their income for calculation purposes. But you'll need a little more to go on than just that quick calculation. There are a lot of other factors that will weigh into how much home you can ultimately afford, such as how much cash you will need for a down payment and closing costs, your monthly income (before tax), and debt payments and credit history 

Begin your shopping with confidence through a pre qualification process. Pre qualification tells you how much mortgage you are eligible to receive if your loan application is approved. It shows sellers that you are serious about buying a home - and helps you narrow down your search to homes within your price range. Contact us for more information about pre qualifying for a home loan. 

A Peek Behind the Curtain. . .

Here's an inside look at what lenders are looking for as they consider your loan request: 

Down Payment - Your housing affordability hinges on the amount of money you can come up with for the down payment and closing costs. The more you can come up with, the less you will have to borrow. 

Borrowing Limits - Earnings and debt. That's what lenders examine as they set your borrowing limits. Your mortgage payments, property taxes, insurance and any other related fees should not exceed 28% of your monthly gross income; this is known as your housing debt. Other debts such as car payments, student loans and credit cars are then added to your housing debts. The sum of all debt should not exceed 36% of your monthly gross. If it does, don't panic, it doesn't necessarily mean you will not be approved, but it will probably reduce the amount of mortgage you will qualify for. These guidelines are for conventional loans, other programs such as FHA have higher limitations. 

Get the Credit You Deserve 

One more thing you'll want to do at the outset of this process is to check the condition and accuracy of your credit report to prevent any "unwelcome" surprises. Your lender will definitely call up your report during the pre qualification process. The more you know and can tell them up front, the better. For a small fee, you can request your credit report from Experian (formerly TRW) or Equifax.. If your credit report is less than acceptable, a more recent track record of good credit management may help your case. A bankruptcy and other credit "dings" does not automatically disqualify you. Contact us for more details. 

Stretching Your Limits

If you've just got to have more mortgage, there are a few things you can do to boost your borrowing power. 

1.) Reduce your long-term debt. Consider putting off the purchase of that new car or boat or accelerate your credit card payments to finish them off before you start into the loan approval process. 

2.) Increase your income. Wait for that annual raise. Or take on an opportunity to earn extra income. 

3.) Weigh your financing options. There are tons of loan programs out there. Try to find one that requires a lower down payment and/or lower monthly mortgage payments. We can help call us for more details.

 

| Home | Programs | Rates | Apply | Contact | First Time Homebuyers | Refinance |
| Mortgage 101 | Buying a Home |

© 2006 Copyright Janus Mortgage  Terms and conditions apply.  Please see our privacy policy for information about how we protect the information you give us.  All rates, programs and fees are subject to change.  Janus Mortgage is a Real Estate Mortgage Broker licensed by the California Department of Real Estate, license number 01078456.