RELOCATING TO HOUSTON - HOME BUYING TIPS #1

  TEXAS BUYER REALTY REALTY Exclusive Buyer's Agents Experts in home construction / inspections Negotiating on behalf of the buyer Representing BUYER'S ONLY Protecting your best interests Representation and service - Not Sales Traditional real estate companys sell homes - We represent you, the buyer !   What you need to know to protect yourself Watch this video before buying a home !     Why Even Experienced Home Buyers Make Costly Mistakes

 When Financing Their Homes... 

Did you know that your knowledge about home financing can mean the difference between making and losing tens of thousands of dollars?

      If you're like most people, home financing...with all its hidden costs and games...can be a daunting and confusing event.  And for about 80% of people out there, borrowing $100,000...$200,000...or even $500,000 or more is the largest financial transaction you will incur in your life. 

     Small mistakes can leverage themselves into big losses of money.  That's why you need to be armed to the teeth, not only with helpful knowledge, but with proven, helpful strategies and questions that will get you the very best mortgage for your situation for the absolute lowest cost available in the market.

     And that's why I created this report...to give you a number of helpful, straightforward tips for avoiding costly mistakes and getting the very best financing for your dollar.

      Here are seven strategies (I call them "secrets" because so many home buyers disregard them when buying a home) you should consider when financing your home:

Secret #1:  Clearly Understand How Much Financing You Can Afford

     Like it or not, there are two guidelines bankers and mortgage lenders use to determine how much loan you can afford. 

      The first guideline is the Payment To Income Ratio.  This guideline compares your income - or your total household income - to the amount of mortgage payment you're considering. 

     To calculate the "payment" part of the formula, the lender will take the mortgage payment (principal + interest) and add to it Property Taxes and Insurance.  Hence the term "PITI" (principal, interest, taxes, and insurance).  

  Usually lenders will loan up to 28% of your total household income.   

  But before you think you're home free, there's something else you need to know...  

It's called the Debt To Income Ratio.  Debt refers to ALL the major monthly payments other than your mortgage payment (PITI).  To arrive at this amount, the lender will consider...  

      Your car payment.

      Your credit card debt and payments.

      Any IRS liens or payments due.

      Any other payments and debts you have (boat, second home, etc.)  

Then, they'll compare your total debt to your ability to make current payments with your new home loan added into the equation.   

Now, here's the "catch."  Each mortgage company sets different limits on your Debt To Income ratio, which is why it's critically important to find a MOTIVATED LENDER!  

 Don't follow the "canned" financial advice like you see on TV.  Most of that advice is "rule of thumb," and designed for the lowest credit rating and highest interest rates.   

      Think about this...  

If you spend two or three days to find a loan that saves you $40,000 to $150,000 or more over its term, your time is WELL WORTH SPENT!  Doing a little homework on your own will literally save you thousands over the term of your loan.

Your next home buying topic will be available in a few days.....         James Potenza ABR,EBA Relocation Director, Broker