• Your monthly mortgage payment should not be more than 28 percent of your gross monthly income (before taxes). This is your housing expense ratio. Keep in mind that the 28% also includes principal, interest, real estate taxes and homeowners insurance, not just mortgage.
• Your total monthly debt should be no more than 36 percent of your gross income. Things included in total debt includes the mortgage payment plus other such things as car loans, child support, credit card bills, student loans, and so forth. This number, your debt-to-income ratio, is also considered.
• Real estate taxes. You will need to know the local tax rate, as taxes are part of your monthly mortgage payment and will differ with each county or even area. You can ask your real estate agent, or call the tax office in the town and ask what the local tax rate is.
• Homeowner's insurance. This is required of all homeowners in order to get a mortgage. You can get an estimate of the costs of homeowners insurance from your insurance agent or an insurance company where you are house hunting.

How to get financing to buy a home
One of the most important things you can do when looking for financing to buy a home is to shop around. Each mortgage place will offer different rates, so it's important to make sure you look at different places to see which ones will give you the best rates on a home. Even a small difference in percentage rates can make a big difference on your total mortgage payment.

You must also qualify to get financing to buy a home, so the first thing you will need to do is apply at a number of different places. This typically includes giving a wide range of information, including time on the job, current debts, income, and so forth. When deciding how much they will lend you, a mortgage lender will typically take the following into consideration:

• Credit history. While you don't need perfect credit to own a home, the better your credit, the better your chances of getting a mortgage loan and the lower your interest rate will be.


• Monthly gross income. This is how much you make before taxes.


• Debt to income ratio. If you already have a lot of debt, lenders may be hesitant to finance you if it is likely you could default.


• Down payment. This is typically around 10 to 20 percent of the price of the home. A higher down payment will bring down the amount of the loan, making your monthly payments smaller, or allowing you to purchase a more expensive home if you have a high down payment.

Types of loans
The two main types of loans are fixed rates and ARMs, or Adjustable Rate Mortgages. Most people will agree that it is better to go with a fixed rate. This means your rate will be locked in for the duration of your mortgage. An ARM, on the other hand, is much riskier. Your rate adjusts after certain amounts of time, which can raise your mortgage drastically.

The above tips will help you to know what to expect when getting financing for a home.