Right now there is a changing landscape in the Denver real estate market. Prices have been increasing for the most part on homes this year. Interest rates have been low, for the most part below 4% all year.

So if you are thinking of buying next year, you may be thinking about budgeting. The big piece of advice I would have is to look at your expenses. How much do you owe in credit card debt? student loans? car loans? other loans? Note the statement payment is what is used for qualifying for a home loan.

If those numbers are a finite percentage of your gross income, it will be much easier to qualify for your home loan. Not to say it will impede you, but will help for sure.

So what can you do if those numbers are not a finite amount of your gross income? Well, you may be getting a year end bonus, an upcoming tax return as well. You could use this money wisely and pay off debts to ease the cash flow burden when buying a house.

What I mean by this, is easily understood with a quick visit to when I first bought my home. I had money set aside , that was hard saved money. So what was I to do? Put a larger down payment? Pay off credit cards? Well the additional money down would have reduced my monthly mortgage by $100 per month. But paying off the credit cards reduced my bills by $400 per month. If you know me, you know where I ut the money. Keep in mind, be disciplined. If you pay off credit cards and charge them up after closing, it can be damaging to being a successful homeowner. Remember if your 401K is not performing you may be able to take a 401K loan where the interest you pay back is to yourself and pre-tax deduction from payroll.

Let me know if you have questions as you prepare to buy a home in 2013!

Happy holidays~

Ray Williams, Branch Manager, Summit Mortgage Denver, 303-779-0591 x101