Get your Budget Correct

If you keep careful track of your expenses, it’s not too difficult to estimate how much you can afford to spend on a house.
This is’s a list of expenditures that you can use to help tally up your monthly expenses:
1) Rent

2) Electricity

3) Gas

4) Telephone

5) Auto Loan

6) Auto Insurance

7) Health Insurance

8) Renter’s Insurance

9) Savings/Retirement Contribution

10) Grocery Bill

11) Weekly Transportation

12) Restaurants/Food Delivery

13) Entertainment

14) Health Club

15) Child Care

16) School

17) Children’s Expenses

18) Housecleaning Expenses

19) Vacations (divide annual expense by 12 to figure monthly average)

20) Books/CDs

21) Newspapers/Magazines

22) Laundry

23) Gifts

24) Major Purchases (stereo/computer)

25) Furniture/Decorating

26) Clothing

27) Sundries/Drugstore Items

28) Miscellaneous Expenses

If your monthly expense total is too close to your monthly after-taxes take-home pay, you should start looking at ways to cut them down.

One of the newest ways to get pre-qualified for a home loan in minutes is a system called “Computerized Loan Origination” (CLO). Some brokers use it in their offices, but they’re currently unregulated so this is are still some potential problems with them:
Many CLOs only use mortgage packages from one lender. Therefore, the mortgage company and broker view you as a captive audience, and you could wind up paying more than market value for your loan.

Even if more than one lender is included in the CLO, it still may not be truly competitive. It’s best to use a CLO only when all lenders are included.

The broker may ask you to pay a fee for using his CLO service. Be aware, however, that the broker may have a financial arrangement with the mortgage company or companies displaying their loan packages. In that case, the broker may have a financial incentive to steer you away from better loan.



The best person to pre-qualify you for a loan is usually an independent lender, not your broker, particularly if they’re a sub-agent for the seller.