3 easy step to find out how much house you can qualify for. It is not difficult to find out. Even many internet sites have on-line tutorials with free credit reporting through Trans Union and Equifax. That is all it takes.

http://www.equifax.com/answers /request-free-credit-report/en _cp

How can a potential buyer determine how much property they can afford and qualify for? How can a potential buyer feel secure with the efforts he is about to undertake to get a beautiful and comfortable home? All the questions can come down to a few easy words. A loan prequalification, good credit and decent time on the job. Money for the down payment is not that big of a deal with the ability of gifting and the carrying of a second trustee, but credit is.

1. Prequalification with a Mortgage Broker:

Before you run out to look at every house for sale in your neighborhood, find out exactly what you qualify for. A good mortgage broker can help you determine what to bring in to get prequalified. All banks require the last two years 1040s. This tells exactly what you made the last two years. If your income has gone up recently, then you will need to document that.

2. So What can you Prove to Bring up your Qualifications:

Bring in the last few paychecks and deduct all over time and extras off the base of the check. Now take off the taxes and any deductions, such as 401K or health insurance. What you have left, is what a bank wants to see. Now you have a rounded figure of exactly what you made. You only qualify for 28-33 percent of that amount.

After you have a net figure from your check, you must deduct your debts. So if you make 3000 dollars each month and have 1500 dollars in debt, you make 1500 dollars and 33 percent of that figure is $500. So you can qualify for a house note of $500, which must include taxes, insurance and PMI insurance if needed. PMI is Private Mortgage Insurance and required on all loans of less than twenty percent down.

But wait, you say that $500 will not buy you a home of your dreams. This means you need a co-borrower. You then bring in a co-borrower who is self employed making $40,000 per year. To you and your wife, you think you are home free. As your co-signer has excellent credit and no debt. But how do they figure in a self employed person?

The self employed must bring in, like you do, their 1040's tax return. All self employed persons have lots of deductions and sometimes the net amount they make is very small. So having a co-borrower that is self employed is not always a good thing. Also, banks are leary of self employed individuals.

3. Creative Financing When You Don't Qualify:

If you want to buy a house for more than $500 a month, you need a sound co-borrower with good credit and few or no debts. The total income between the two of you must show a net large enough to qualify for the dream home. Then take the 28-33 percent off that amount and you have exactly what you can afford.

Free Mortgage Calculator:

Here is a free mortgage calculator to determine your rate. Take your monthly payment and times it times three and that will give you what your required net income is per month. With that information in hand, you will begin to realize exactly what you qualify for.

http://www.bankrate.com/calcul ators/mortgages/mortgage-calcu lator.aspx

Once a buyer has all his cards in a row, he can now know positively what he qualifies for. This knowledge can bring him security and give him an ideal if the agent he is dealing with is telling him the truth. Once the buyer sees what his mortgage payment will be, he will be able to see more if he wants to go down that road or not.

Learn more about this author, Barbi Trejo.
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