The rule of thumb is that your house payment - including principal, interest, tax and insurance, should be no more than 28% of your monthly income and combined with all your other debt payments should be no more than 36% of your income.
If you think you can't afford to buy a home, you might be surprised! Chris is a Participating Partner with the Washtenaw Housing Education Partners (WHEP) program, ready to put you in touch with local downpayment assistance programs, the homeowner assistance program, and the homebuyer education program. There are many programs available from the state of Michigan, Washtenaw County, and both Ann Arbor and Ypsilanti. There is a lot of information and help available to you! Give me a call and I'll get you started.
What kind of loan should you get?There are many different options for loans, and not all lenders offer every kind. The old 30 year loan with 20% down is still popular, but by no means the only choice. Loans can come in lengths of 1, 3, 5, 7, 15, 20, 25 or 30 years, with varying accompanying terms.
Some loans are amortized over 30 years, that is, with the payments the same as if there were 30 years to repay the balance, but the length of the loan may only be a few years, at which time the remaining balance on the loan is due in the form of a "balloon" payment.
Loans may also have an interest rate that doesn't vary during the life of the loan, or one that may change multiple times per year depending on how interest rates change throughout the economy. Usually on these adjustable rate mortagages (ARMs) there is both an annual and a total cap which sets the maximum amount the rate is allowed to rise.
When you talk to your lender about the right loan for you, you should take into account how long you plan to stay in the house, how much of a down payment you'd like to make, and consider whether interest rates are currently at historic highs or lows. All of these will affect the choice you make.
Why do I need Title Insurance?Title Insurance insures that even if something is found wrong somewhere in the chain of title of all the people in the past who owned your house, the money you paid for it is insured.
There are usually two title policies when you buy a house - the Sellers will buy one for you, guaranteeing that they actually own the house - and you'll buy one for your bank in case their collateral on the loan (the house) turns out to belong to someone else.
You may reach Chris at: chris@weber-real-estate.com, or phone (734)216-2120
You may reach Jon at: jon@weber-real-estate.com or (734)323-2535
General queries may be addressed to: info@weber-real-estate.com
Weber Real Estate Company
216 East Huron St.
Ann Arbor, Michigan 48104-1907
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