• Ask yourself these questions and if you can answer “yes” to these questions, you are probably ready to buy your own home.

• Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2 – 3 years? Is my current income reliable?
• Do I have a good record of paying bills?
• Do I have few outstanding long-term debts, like car payments?
• Do I have money saved for a down payment?
• Do I have the ability to pay a mortgage every month, plus additional costs?

Start by thinking about your situation. Are you ready to buy a home? How much can you afford in a monthly mortgage payment? How much space do you need? Do you have access to land? After you answer these questions, make a “To Do” list and start doing casual research.

The most significant advantage to renting is being generally free on most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for housing.

Owning a home has many benefits. When you make a mortgage payment, you are building equity, which is an investment. Owning a home can also qualify you for tax breaks that actually lower your monthly out-of-pocket costs. Given the freedom, stability, and security of owning your own home, it is worth it.

The lender considers your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing expenses and non-housing expenses. Non-housing expenses include long-term debts like car or student loan payments, alimony, or child support. According to Salt River Financial Services guidelines, the mortgage payment combined with non-housing expenses should total no more than 41% of income. The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

Your home should fit the way you live, with spaces and features that appeal to the whole family. Before you begin considering home ownership, make a list of your priorities – such as location and size. Is your allotment accessible to water, electricity, and other service related needs? Will there be any rights-of-way issues with the allotment? Will the allotment pass the “Homesite Withdrawal” process (see the SRPMIC Realty Department for more information)? What kind of amenities are you looking for? Establish a set of minimum requirements and a “wish list”. Minimum requirements are things that a house must have for you to consider it. A “wish list” covers things that you would like to have but are not essential.

A credit bureau score is a number, based upon your credit history that represents the possibility that you will be unable to repay a loan. Lenders use it to determine your ability to qualify for a mortgage loan. In some cases your actual “score” is not considered, rather your overall credit history is taken into consideration.

There are no easy ways to improve your credit score, but you can work to keep it acceptable by maintaining a good credit history. This means paying your bills on time and not overextending yourself by buying more than you can afford.

Yes. There are fees such as an origination, appraisal, document preparation, credit report, processing, homeowner’s insurance and down payment. You will be given a Good Faith Estimate and Disclosure statements that will elaborate on these fees.

To ensure you will not fall victim to loan fraud, be sure to follow all these steps as you apply for a loan:

• Be sure to read and understand everything before you sign.
• Refuse to sign any blank documents.
• Do not buy property for someone else.
• Do not overstate your income.
• Do not overstate how long you have been employed.
• Do not overstate your assets.
• Accurately report your debts.
• Do not change your income tax returns for any reason.
• Tell the whole truth about gift funds.
• Do not list fake co-borrowers on your loan application.
• Be truthful about your credit problems, past and present.
• Be honest about your intention to occupy the house.
• Do not provide false supporting documents.

A mortgage is a loan obtained to purchase real estate. The “mortgage” itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages have two features in common: principal and interest. Principal is the amount you borrow to purchase the home. Interest in the percentage you pay the lender for lending you the funds.

Yes! By sending in extra money each month or making an extra payment at the end of the year, you can accelerate the process of paying off the loan. When you send extra money, indicate that the excess payment is to be applied to the principal.

There are mortgage options now available that only require a down payment of 2.00% of the purchase price. But the larger the down payment, the less you have to borrow and the more equity you will have. When considering the size of your down payment, remember that you will also need money for closing costs, moving expenses, repairs, and decorating.

The amount of the down payment, the size of the mortgage loan, the interest rate, the length of the repayment term, and payment schedule will all affect the size of your mortgage payment.