Think again about buying a home.
What do you want to know?

The Rules of Home Affordability

Mortgage lenders use something called qualification ratios to determine how much they will lend to a borrower. The CU Promise loan is offered by credit unions in your state. Using local credit unions for a mortgage loan give you, the consumer, better rates, personalized service and leading experts by your side.

1. Your maximum mortgage payment: The golden rule in determining how much home you can afford is that your monthly mortgage principal and interest payment should not exceed 28 percent of your gross monthly income (your income before taxes are taken out). For example, if you and your spouse have a combined annual income of $80,000, your mortgage payment should not exceed $1,866.

2. Your maximum total housing payment: The next rule stipulates that your total housing payments (including the mortgage, homeowner’s insurance, and private mortgage insurance [PMI], association fees, and property taxes) should not exceed 32 percent of your gross monthly income. That means, for the same couple, their total monthly housing payment cannot be more than $2,133 per month.

3. Your maximum monthly debt payments: Finally, your total debt payments, including your housing payment, your auto loan or student loan payments, and minimum credit card payments should not exceed 45 percent of your gross monthly income. In the above example, the couple with $80k income could not have total monthly debt payments exceeding $3,000. If, say, they paid $500 per month in other debt (e.g. car payments, credit cards, or student loans), their monthly mortgage payment would be capped at $2,500.

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Usually Better to Buy

It’s almost always better to buy a home than to rent. Only when
at least one of the following applies is it probably better to rent:

  1. Your rent is lower than average—and you expect it to stay
    that way.
  2. You plan on moving in a few years.
  3. You’re in a super-expensive housing market.
  4. You can get better-than-average returns from whatever
    you’re investing your cash into.
  5. The house you would buy is a lot larger than what you
    would rent.

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Pre-Qualification Letter

We’ll issue a pre-qualification letter online instantly if you meet specific program guidelines. You can use the pre-qualification letter to assure real estate brokers and sellers that you are a qualified buyer. Having a pre-qualification for a mortgage may give more weight to any offer to purchase that you make.

Contact us at 877-505-9555 or Email