Pre-Qualify Yourself
Getting pre-qualified by a mortgage professional is always the first step in the house hunt. After all, you don't know what to look at if you don't have a price range to start with. Having a professional pre-qualify you will help clarify those hard to figure items: rental income, bonuses, insurance cost, taxes, etc. However, if you need a place to start to see if you even want to approach a mortgage professional then this is a quick and dirty way to pre-qualify yourself.Front End Ratio
Your monthly housing expense or Principal , Interest, Taxes and Insurance (PITI) can't be higher than 28% of your monthly income. This does not include your hoa fee.Back End Ratio
This differs depending on your type of loan. For the two most popular loans you have a 36% maximum for conventional and 43% maximum for FHA.This ratio is your total monthly debt obligation portion of your monthly income. This would include minimum payment on credit card bills, car loans, condo/hoa fees, other mortgages, etc.
Sounds easy enough. But if you are self employed then you should take the average of the NET income from your last 2 tax returns. Please be aware some lenders might just use the lower of the last 2 year tax returns.
Down Payment
In addition, you are limited by your down payment. For a conventional loan you need at least 5% down for the purchase of a Jacksonville home. For a FHA loan you need at least 3.5% down for the purchase of a Ponte Vedra Beach home.Loan Limits
You loan can't be bigger than $417,000 if you want to get a conventional loan. Everything higher would be a Jumbo Loan.For a FHA loan you can't have a loan for a home in Duval County larger than $304,750 and for a home in St. Johns County you can't have a loan larger than $304,750. That's right. Duval County and St. Johns County loan limits are the same. Posted by Carey Frankel on
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