Mortgages: Banks are requiring down payments again for home loans

Posted by on Saturday, November 29th, 2008 at 9:06am.

From luxury home buyers to first time home owners, most metro Atlanta banks are again requiring down payments.

It’s a fact that it is harder to get approved for a home loan than it was even a year ago. But the bottom line is that if you have good credit and a sufficient down payment, you can still get approved for a mortgage. 

If the thought of a down payment plagues you, then you’re not alone. Many home buyers are downright overwhelmed at the notion of saving 20 percent (the percentage that most banks are now asking for) of the cost of their home. But it can be done! 

Your first order of business should include figuring out how much of a home you can afford based on your salary. There are many, good mortgage brokers out there that have that can help you determine what you can afford to spend on your next Atlanta home.  

An even better solution would be to meet with a mortgage broker or a professional Tina Fountain Real Estate Agent who can help you determine how much you can comfortably afford to spend each month on your mortgage. You can also try our mortgage calculator as a starting point. Keep in mind that your income alone will not determine this. Other factors include your debt-to-income ratio and your credit rating. The current interest rates will also play a role in this equation. And, with current interest rates at or near record lows, now is a great time to be buying.

However, getting a close estimate of your price range can help you determine how much you’ll need to sock away to purchase your Atlanta home. 

Making a Budget 

Perhaps the easiest way to determine how much money is going in and out of your checking account each month is to make a household budget. Drafting a household budget is essential, as it can quickly pinpoint just how much money you are spending on any given month. It can also identify areas in which you can cut back. Be sure to include all monthly bills and utilities, as well as gas, food, clothing and other monthly expenses.  

Establish a Reasonable Goal 

Once your budget is made, determining how much you can afford to save each month is a simple matter of Income minus Debts. Once you have identified the amount you can reasonably save each month, consider automatic withdrawals into a savings or money market account. Most people are far more likely to save if they never even see the money. Let it go straight into an interest-earning account and forget about it. 

The reason I use the term “reasonableā€ is that many homebuyers set unrealistic savings goals that cannot possibly be attained, only to feel defeated when they can’t meet the goal.

Instead, figure out how much money you’ll need to save each month to accomplish your goal in a predetermined time frame. 

Don’t Forget an Emergency Fund 

While saving for a home, it is also important to realize that you should also establish an emergency fund, if you have not already done so. An emergency fund, which most financial experts agree should equal about six to nine months of your monthly income, is essential for covering bills and expenses if an emergency or unexpected job loss occurs.

For more information on metro Atlanta Real Estate contact Tina Fountain Realtors at 404.842.1555. 


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