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

First Time Homebuyer Programs in Idaho
The Idaho Housing and Finance Association, otherwise referred t as IDFA, is Idaho's uniquely created and organized financial institution and administrator of affordable housing resources.

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First Time Homebuyer Programs in Delaware
In the year 1968, The Delaware State Housing Authority was created as a public corporation under the Delaware State Department of Housing. The move was inspired by the need to address the concerns of the people in Delaware who seek homebuying-associated assistance.

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How to Get a Government Home Loan with Low or Moderate Income
The government provides loans to those individuals who have low to moderate income for permanent residence in rural areas. To qualify for these government loans is not that hard and the restrictions ...

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California Homebuyer's Downpayment Assistance Program for First Time Home Buyers
The California Homebuyer's Downpayment Assistance Program is a deferred payment junior loan that can be used in conjunction with other CalHFA housing programs. It provides borrowers with funds amounting to 3% of the actual value of the property that they wish to inquire in order to cover the downpayment costs.

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