Frequently Asked Questions about Buying Your First Home
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Lenders look at the overall debt-to-income ratio. They like to see that your monthly housing payment, plus everything on your credit report (including car payment, credit cards, etc.), is not more than 50% of your total gross monthly income (before taxes).

If you want to buy a $100,000 home, the monthly payment will be $1,000. Suppose you also pay another $500 each month in other bills that are on your credit report. That’s a monthly debt of $1,500. You would need to earn about twice that, or $3,000 a month, to qualify for the home loan, typically.

What type of credit do I need to have?

For an FHA loan, which is very popular, buyers generally need to have clean credit for the past 12 months, meaning that payments have been made on time. Many lenders don’t worry about credit problems that took place in the past, as long as the past year is good and clean.

What if I don’t have other loans or credit cards?

The FHA and other lenders are very willing to consider what they call “alternate lines of credit.” That is, any type of payment history that shows that the buyer is able to make regular payments on time. These can include items such as rent, utilities, telephone, car insurance and child-care payments. If a buyer can show clean, 12-month payment histories for at least 3 of these types of alternate lines of credit, that is generally good enough.

About The Author Damon Thomas is a contributor to www.casanuevahouston.com, a Houston-based company providing information for new home buyers.

Frequently Asked Questions about Buying Your First Home
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Additional Resources

category - Home Buying Programs

Homeownership Program for First Time Homebuyers in Connecticut
The Connecticut Housing Finance Agency has established the Homeownership Program wherein it intends to provide reasonable home loans with below-market interest rates to tenants occupying publicly assisted housing who wish to transition from renting into homeownership.

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Section 8 Housing Choice Voucher Homeownership Program
The Connecticut Housing Finance Agency has been administering the Section 8 Housing Choice Voucher Homeownership Program wherein they intend to offer home loans at reasonable, below-market rates to Section 8 tenants who wish to purchase a home of their own.

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Connecticut Housing Finance Agency Mortgage Programs for Military, Police and Teachers
The Connecticut Housing Finance Agency has established the Mortgage Programs for Military, Police and Teachers so as to provide reasonable housing opportunities to veterans and active duty service members of the United States Military, the National Guard, along with teachers and police officers who are assigned in under-served areas.

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Urban Rehabilitation Homeownership Program for Homebuyers in Connecticut
In accordance with this mission, the Connecticut Housing Finance Authority has established the Urban Rehabilitation Homeownership Program wherein it intends to home purchase loans at steady, below-market rates together with home improvement loans with no interest, all in an attempt to support homeownership and investment in selected Connecticut neighborhoods.

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