More on Mortgage Payments for NOVA Homebuyers in 2013

The down payment presents the biggest obstacle to homeownership for most buyers, especially first-time buyers and those in lower income brackets. Fortunately for those people, lenders have become more willing to underwrite mortgages with small down payments.  If you need some help finding a good lender I can give you some great people in the NOVA market.

Most mortgage lenders require a cash down payment between 10 to 20% of the sale price. Some lenders have zero-down mortgage programs. If you can put down more than your lender requires, say 25 to 30%, your lender may be willing to overlook credit blemishes, approve your loan without verifying your income or both. If you come up short on the down payment, with less than 20% of the buying price, before your loan is approved you may have to obtain private mortgage insurance, or PMI, to protect the lender.  You can often lower your mortgage payment or afford a more expensive house by putting more money down.

The Lowdown on Down Payments:

If you make $40,000 a year your monthly mortgage payment (28% of gross income) would be $933. Your total monthly debt should be no more than 36% of your gross income; so in this senario: $1,200. The bigger the down payment, the more expensive the house you can buy.  So, let's say your monthly mortgage payment of $933 has an interest rate of 7.5%. In a 30-year fixed-rate mortgage, that monthly payment covers a total principal of $133,435.45. With 10% down, that mortgage would cover a house worth $148,262. With 20% down, the house price would be $166,794.

If you need more information or help determining how much you can afford, please don't hesitate to contact me with any questions.  I am here to help!

Earle Whitmore
Long & Foster Real Estate, Inc.
Visit Our Website
View Northern Virginia Homes for Sale
Become Our Facebook Fan
Follow Us On Twitter
Connect With Us On LinkedIn
Contact Us

Reference: www.bankrate.com