4G Mortgage will assist you in shopping for a home loan
or mortgage and will help you get the best financing deal available. A
mortgage--whether it’s a home purchase, a refinancing, or a home
equity loan--is a product, just like a car, so the price and
terms may be negotiable. You’ll want to compare all the costs
involved in obtaining a mortgage. Shopping, comparing, and
negotiating may save you thousands of dollars.
Homeownership remains one of the highest goals for many people
because of its many benefits. Along with owning a home comes a
sense of security and belonging that cannot be found elsewhere.
For many, homeownership represents personal and financial
success.
There is much personal satisfaction in living in a home that you
own. A home is a valued investment that can have many financial
advantages and tax benefits. The interest you pay on a home loan
and the real estate taxes you pay on your home are among the few
major federal tax deductions. Owning a home is the primary way
most people build wealth.
Homeownership is also good for our communities, because families
who own their homes are more involved in their communities and
participate in local events.
The rewards of homeownership include:
Personal satisfaction
Sense of community
Tax savings
Stability for you and
your family
Investment in the
future
SO HOW MUCH OF A MORTGAGE CAN YOU AFFORD?
There are two basic formulas commonly used by lenders to
determine how much of a mortgage you can reasonably afford.
These formulas are called qualifying ratios because they
estimate the amount of money you should spend on mortgage
payments in relation to your income and other expenses.
It is important to remember that the following ratios may vary
from lender to lender and each application is handled on an
individual basis, so the guidelines are just that — guidelines.
There are many affordable housing programs, both government and
conventional, that have more lenient requirements for low- and
moderate-income families. Many of these programs involve
financial counseling to help potential home buyers learn about
the financial responsibilities of owning a home.
Generally speaking, to qualify for conventional loans, housing
expenses should not exceed 26 to 28 percent of your gross
monthly income. For FHA loans, the ratio is 29 percent of gross
monthly income. Monthly housing costs include the mortgage
principal, interest, taxes and insurance — often abbreviated
PITI. For example, if your annual income is $30,000, your gross
monthly income is $2,500, and $2,500 x 28 percent = $700. So you
would probably qualify for a conventional home loan that
requires monthly payments of $700.
