LoanSmart To Provide Homebuyer Readiness Reviews

When purchasing a home whether or not it is your first home or you are you are moving up, there are some basic steps that you can insure a successful financial decision.

*Review your monthly income. As a rule of thumb, the mortgage payment—including principle, interest, taxes, and insurance— should not exceed 28 percent of the gross income before taxes are taken out. The total mortgage payment, plus the monthly payments on credit cards and installment debt such as car and student loans, should not exceed 36 percent of the gross income.

Many lenders will approve higher ratios than these, however. If you stay under or close to these ratios, you will have a mortgage payment that will fit well within any monthly budget.

*Gain an understanding of the tax benefits to purchasing. The federal government strongly encourages home ownership in the country. In most cases, all of the mortgage interest paid is a tax deduction that you can claim on your tax return.

In addition, you can claim tax deductions on the real estate taxes that you pay. These write offs can save thousands of dollars worth of taxes.

Lastly, first time homebuyers—defined as people who have not purchased in the last three years and own no other single family homes—can now receive a tax credit up to $7,500 or 10 percent of the purchase price.

To gain the proper understanding of the tax benefits of owning your own home or if you want to invest, it is highly recommended to consult with a professional licensed tax advisor or CPA.

*Meet with a mortgage professional to get prequalified and preapproved. During this process the mortgage professional can work with you on your budget. The lender can go over your credit report with you and provide you with the current loan programs and interest rates that are available in today's marketplace. Then you can get a formal approval from the mortgage professional. Now you can concentrate on looking for the property of your choice and not have to worry about the approval process for the loan.

*Select a real estate agent in the area. The real estate agent has access to all of the local inventory, including the foreclosures, short sales, and regular inventory. You can meet with them and let them know what you want and they will educate you on what is available at the price range you are looking for. In many cases, you will have to adjust your expectations between what your dream house and what fits your budget.

Remember, statistics show that most people will buy and move five to six times in their lifetime, so your first home will more than likely not be your last. LoanSmart perfoms complimentary homebuyer readiness reviews.

For more information, call Joe Engle at (805) 4900009 or visit www.loansmartinc.com.