Why would you want to buy a house today? If you turn on any news program, odds are you’ll come across a piece on the terrible state of the economy, and the real estate sector in particular. In fact, it could be said that inflated home prices are what got us all into this mess in the first place.

With the damage already done this actually is the ideal moment to buy an Austin area home. The prices for real estate havent been quite this low for many years, and say youve been saving up; you have what you need to grab the advantage. Several homes listed for sale in Austin, TX that would not normally be listed, but due to foreclosures and high balances mortgage wise, they are now.

Such a large number of these Austin homes have been taken over by the banks who backed their mortgages. Today the banks have a large quantity of properties that are unwanted and looking forward to selling them, this desperation of the banks is a driving force to the real estate prices falling even lower than they were, which gives you a great chance to benefit and buy new home in Austin, TX.

Whether you are trying to purchase a condo or buy a home, you will find there is more than one way to do it. Well the standard approach is still used many times. You can visit a real estate firm and talk to a Realtor. The Realtors only get a fee if you are going to purchase a house using them, and this is many times of value. By utilizing a Realtor, you are assured having more properties to look at in the Austin area you want to buy your house in. Many of the houses you probably did not know were for sale.

Many real estate companies work with banks that have found themselves suddenly overwhelmed with foreclosures and they are desperate to sell off some of those unwanted assets. When you are looking to buy a home in Austin for your family to occupy, rather than just another real estate investment, using a professional agent really is the best way to go. They will do everything they can to get closer to exactly what you want so you and your family will be more satisfied in the end.

Through the present real estate market you could even be able to buy new home that one of the local Austin area builders has not been able to sell. This is the time for homebuyers to look for bargains. With everything being computerized today, you need not leave your house to make a purchase. A lot of realtors now have listings on their own websites, permitting potential clients to see the pictures and to take virtual tours of their properties.

Moreover, if youre in the market to purchase a new home in Austin keep in mind, many real estate companies have started doing real estate auctions on the Internet. This allows homebuyers to take a virtual tour of the property or sometimes even bid and buy a home online. Always keep a list of properties you are interested in and the highest price you are willing to go and stick to your limits.

There are many ways to go about buying a home in the Austin area, if you are looking to become a homeowner and want a nice home for you and your family to live in. Even with all the negative stories you hear about todays declining economy, it is still one of the best times to buy a home for yourself in Austin, TX.

So, you want to know how much home you can afford. What I want to outline to you in this article is how lenders determine this. You don’t necessarily have to speak to a loan officer to find out.

Lenders use a term known as debt to income ratios. They use two of them. One is known as a front end ratio.

The lender will use your gross monthly income to determine your front end ratio.

For FHA loans lenders like to see the ratio of the monthly payment of the house, including taxes and insurance, not exceeding 29% of your monthly gross income.

A thirty-three percent front end ratio is generally used as a basis for conventional loans.

For a lender to determine loan payment amount a prospective borrower must qualify on the front and back end.

Mortgage companies factor the rear end ratio in a simalar manner to front. The only real difference is instead of comparing income to just the house payment it is compared to the house payment plus all other monthly debt payments.

For FHA this ratio is best not to exceed 41%. For conventional loans it is 38%.

It is pretty easy to determine your monthly debt payments. What isn’t so easy for the non-mortgage loan officer to determine is the actual income.

For those on salary who have been on the job for a year plus, it is simple. Most people are not paid so simply.

It runs the gambit from construction workers who make money based upon the economic environment, to hourly workers, to commissioned based folks who write off everything under the sun on their returns.

Others work part time, and you can add many etc’s here.

A good rule of thumb if you are basically self employed or receive most of your income via commission is to average your last two years tax returns.

It is a shame that mortgage companies require the use of tax returns like that. We all know you make quite a bit more money than what is shown.

Once you come to some conclusion here you should still seek the advice of a good mortgage lender. I wish you the best in your next home purchase.