How much you can I afford

Before you begin the search for your dream home, decide how much you can comfortably spend. Mortgage lenders most often will take into consideration all of the following:

• The size of your down payment
• Your job stability
• Existing debts
• Credit references and, Payment history.

Knowing your credit status and how credit agencies rate your credit also may be a deciding factor, especially when you begin talking to lenders. There are three main credit-reporting agencies that will, for a small fee, send you the most current credit report on file.

Experian - 1888-EXPERIAN (397-3742)
Equifax - 1800-997-2493
Trans Union - 1-216-779-2378

Lenders usually use the following two qualifying guidelines to decide how much of a loan you can manage:

Your monthly housing expenses - mortgage payment, property taxes, insurance, etc. These expenses should total no more than 28 percent of your monthly gross income.
Your monthly living expenses and any long-term debts - utilities, car and school loan, child support, health and car insurance, etc. These expenses should be no more than 36 percent of your monthly gross income.