Can I Afford a Home?

Mortgage lenders are chiefly concerned with your ability to repay the mortgage. To determine if you qualify for a loan, they will consider your credit history, your monthly gross income and how much cash you'll be able to accumulate for a down payment.

Mortgage lenders will calculate an affordability analysis of a buyers ability to afford the purchase of a home. Reviews income, liabilities, and available funds, and considers the type of mortgage you plan to use, the area where you want to purchase a home, and the closing costs that are likely.

They also use a debt-to-income ratio, which are the housing expense, or front-end, ratio; and the total debt-to-income, or back-end, ratio.

Front-end ratio: The housing expense, or front-end, ratio shows how much of your gross (pretax) monthly income would go toward the mortgage payment. As a general guideline, your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross monthly income.

Back-end ratio: The total debt-to-income, or back-end, ratio, shows how much of your gross income would go toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees. In general, your total monthly debt obligation should not exceed 36 percent of your gross income.

Center State Mortgage offers the lowest interest rate on home loans and mortgages in Straten Island and New Jersey! They have professional staff that work hard to get you the home of your dreams! Choose Center State Mortgage for your next home loan or mortgage!