Archive for August, 2009

I've been working on finding an FHA approved condo for a client of mine and it's taken a little longer than expected because there are several moving pieces to the deal.  Usually when you look for a home and are preapproved for a mortgage, you know exactly how much home you can afford.  If you can afford (and are preapproved for) $150,000,  you would look at condos at or under that price.

However, when your lender thinks about how much home you can afford they think differently, and they look at your total monthly housing expenses relative to your income.  For a condo, monthly housing expenses would include maintenance fees, taxes, as well as your mortgage payment.  For each property, maintenance fees and taxes are fixed,  what the lender figures out is how much of a monthly mortgage payment you can make.  From the mortgage payment, the lender is able to calculate the mortgage amount, and when added to your down payment produces how much house you can afford.  What you need to keep in mind is that the more your maintenance fees and/or taxes are, the less house you can afford.