How much mortgage can I afford? In Bristol, CT this is a common question many first time home buyers have. An FHA Mortgage may be an option, but there are several things that we will want to look at. First how much money do you make, then what are your bills, and how much are you comfortable spending each month on your mortgage.
How much money you make? We will want to look at how much money you gross from your job, or what you pay taxes on if you are self employed. Questions that may ask: What do you make an hour? How many hours a week do you work? What is your annual salary? Over the past 2 years what have you received for bonus, or commission income? If you are self employed (yes you can get an FHA Mortgage being self employed) we will want to know among other things, what are on line 13 and 31 of your Schedule C of your 1040's. In figuring how much money you make we can count income you tell Uncle Sam about, but can't count "under the table" money, unreliable or undocumented income FHA Mortgage or not no lender will accept income like that. Having your paystub or recent tax returns available will help a great deal in getting a correct answer to "How much money do you make".
What are your bills? An FHA Mortgage is no different than any other mortgage in that we need to determine how much you spend on your bills. We will obtain a copy of your credit report and ask you some questions about bills which may not be reported to the credit bureaus. Do you pay alimony, child support or other separate maintenance payments? Do you have unreimbursed business expenses? Have you co-signed for anyone on a debt? Bills we generally don't need to know about are things like electric bills, car insurance, cell phone bills or the like. Those are recurring living expenses anyone in Bristol, CT will have and generally not included in your "bills" for the purpose of answering how much mortgage can I afford. Those living expenses certainly are a part of the last part of the FHA mortgage payment puzzle, what are you comfortable spending each month.
What are you comfortable spending each month? There are multiple answers to the question of your mortgage payment. The first is what you would love it to be, we all dream of zero, living at mom and dad's is about the only way to do that and I don't know to many parents where it would be totally free. Then what can you afford in your real life, and what could we get an approval for. You should never spend more than you can reasonably afford, even on an FHA Mortgage just beacause the bank will say yes to it. Spending to much is a recipe for disaster in Bristol, CT or any town. You still need to be able to mail the check for your payment each month.
This is a general overview of the process to answering "How much mortgage can I afford". Just as you would not self diagnose yourself, you go visit the Doctor, today's mortgage environment requires a professional to help you navigate the mortgage waters to make sure that your income and expenses have been calculated correctly. You may have heard an FHA Mortgage is a great loan, let's talk about what is right for you. Call me at 860-306-8029 and we can discuss your situation and get an answer to how much mortgage can YOU afford.
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As quoted in the New York Times "A Little-Known Loan Program", and in the Hartford Courant "Moving In:Couple Combining Households Buys In Newington" and "Moving In... New Britain"