A Dose of Education Helps the Anxiety Go Down....

A DOSE OF EDUCATION HELPS THE ANXIETY GO DOWN...  Understanding what you want and who you are will provide you the confidence you need when shopping for a home and more importantly a home loan.  We will walk through the many different steps in the loan process piece by piece.  For now let's break down some of the terminology term by term.  One of the first parts of the equation that the bank looks at is your debt to income ratio.

Your debt to income ratio is just like it sounds.  What are you spending monthly in payments for other loans such as credit cards and car loans compared to how much you make. 

Monthly debt/monthly gross income (before taxes)

That sounds simple enough right? Now lets take that one step further what is your TRUE debt to income ratio.  Your debt to income ratio for the bank is one of the things that  will determine "how much" you can afford however your TRUE debt to income ratio for you should include the following budget items:

• Monthly utility bills (they will increase if you increase the size of your home)
• Monthly gas bills (how much are you spending every month on the gas in your car)
• Monthly grocery bill
• Monthly entertainment expense
• Monthly grooming expense (hair cuts etc)

By looking at not only what you spend on the monthly loan payments but looking at your true monthly expense in maintaining your current lifestyle will give you a true idea as to not just what you can afford, but what you are comfortable with.

This is important for your confidence when shopping for a home because you will be confident in what you can afford and what you are comfortable with keeping you from making any last minute decisions based on anxiety and not on the facts about who you are that you have established.

 

**********************************

Are you looking for a home loan? Give me a call at 480-344-3667 or email me at lindsay.luton@academy.cc

www.academymortgage.com/lindsayluton