As we see the real estate market starting to turn back towards profitability, a lot of people are starting to ask questions about how to go about getting a home loan and what they can expect for a down payment.  With interest rates at all time lows, and FHA loans asking only 3,5% down more and more families are finding the dream of home ownership well within their grasp.

You will need to save for a down payment and be ready to show that you have the money to do this before applying for the loan. You can visit the FHA website for the calculator that is available to figure out how much of a home you can afford. This is a great place to start when planning to buy your first home. Once you’ve calculated the amount you will know how much income is needed along with the down payment.

Generally speaking you should have between 30-36 percent of your income available for a mortgage payment. Anything over this would make it hard to qualify for a loan and would be the negotiable factor of the loan, based on down payment amounts, and credit score, as well as the type of loan.

If you have car payments, a student loan, child support payments, or monthly credit card payments, they count against your income. They are all part of the equation in calculating how much income you have available to spend on a mortgage.  The fewer expenses you have the better, as these small things can rapidly add up to a large amount of money.

Don’t forget that other hidden costs that are involved with owning a home. Mortgage insurance will be required by the lender if your down payment is low as well as home owners insurance. There are also property taxes which will be different for each state. Condos carry home owner’s association fees which can vary greatly depending on the property. Also newer home tracks may also have home owner’s association fees attached to them. If the home you want to buy is in a flood plain or earthquake area your lender may require even more insurance. Fire prone and mud slide areas also have higher insurance rates too.