The dream of many families is to have a home of their own. However, not all qualify for a home loan or have the money to give a prompt. But this is no reason to give up that dream. There is an option to apply for the loan. If you have access to the Internet, you can use online home loan eligibility calculator that can give you a more complete picture. First, we will analyse the resources you can use to face your initial payment and the closing costs of the operation. Then we will consider the guidelines that loan entities use to determine the amount they will lend to a home buyer. Finally, we will discuss the issue of credit. Your down payment If you are buying your first home, the affordable price may be limited by the required down payment and closing costs. Unlike homeowners who can dispose of mortgage or equity accumulation on their property, it is likely that the main resource is their savings. If you do not have much money saved, you may need to regularly separate funds from your pay check to meet the down payment. Your loan capacity In addition to the initial payment, there is another important factor that limits the value of the house you can buy that is the amount you can borrow. When you submit a mortgage loan application, the lender will primarily consider three factors to determine the volume of the loan that will grant you: Income, current level of indebtedness, credit history. Eligibility guidelines for loan entities Generally, to determine the amount of the loan for which you meet the requirements, lenders use two eligibility guidelines. Your monthly expenses which include mortgage fees, property taxes, insurance, and cooperative expenses, when applicable should not add up to 28 percent of your gross monthly income before deduction of taxes. Your monthly housing expenses plus any other long-term debt must not add up to more than 36 percent of your gross monthly income. Loan institutions and financial advisors recommend not spending more than 25-28 percent of their income on housing and no more than 33-36 percent on total debt which is housing, credit cards and other debts. In certain situations, you can exceed these amounts, but these rules are a good starting point for a person who buys their first home. There are some local, state and federal programs that set limits on the percentage of the debt a person can have to participate in the program. When you submit an application for a home loan, the lender will use all the data relevant to your income, your debts, the purchase price of the house, your initial payment, the interest rate of the loan and the cost of taxes to the property and insurance - and will quickly use home loan eligibility calculator to check if you meet the requirements to borrow the amount you need to buy the house. Keep in mind that meeting the eligibility requirements is only the first step in the approval of the loan. Through the qualification process, the amount of the home loan you can obtain is determined if your loan application is approved.
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