We all know this is a great time to buy real estate…especially for first time home buyers in the Andover area.  Housing is more affordable than it has been in many years.  Still, if there is one thing we can take away from the real estate meltdown it is a realization of the importance of purchasing a home you can afford.  The time to buy a home has as much to do with your personal and economic well being as it does with the condition of the housing market.   Hopefully we’ve all learned some lessons from the days of risky loans and over-leveraging your assets.  In today’s real estate market it is more important than ever to borrow only what you can afford.

According to an article at Yahoo Real Estate, “Mortgage lenders generally use a ratio of 36 percent as the guideline for how high your debt-to-income ratio should be. A ratio above 36 percent is seen as risky, and the lender will likely either deny the loan or charge a higher interest rate. Another good guideline is that no more than 28 percent of your gross monthly income goes to housing expenses.”

Keeping the percentage at 28% or lower can only improve your financial situation.  Take a good hard look at your finances, look at your income and look at your expenses.  Consider your personal spending habits and long and short term personal and financial goals.   In the long run you and your bank account will be better off for being realistic.

Click here and find helpful information on calculating an affordable mortgage at Yahoo Real Estate.

Contributed by Paulette Zuena, RE/MAX Partners
Phone: (978) 482-3900 | Contact Paulette
www.YourPaulette.com

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