MAYVILLE - Successful homeownership begins with knowing ''your numbers'' according to housing specialists at Chautauqua Home Rehabilitation & Improvement Corporation. Just as with managing health requires keeping an eye on key physical indicators, the path to successful homeownership begins with the knowing the four most important financial numbers that lead to sustainable homeownership.
''Homeownership is what the vast majority of Americans want to achieve,'' said Mayra Alvarado, CHRIC Homeownership Program manager. She said that June is also designated National Homeownership Month by the Department of Housing and Urban Development.
The four key homeownership numbers are:
1) How much mortgage could you comfortably afford
2) What are current mortgage rates
3) What is your credit score
4) What is your down payment
How much home could you comfortably afford is an important first number because it's the one number that probably won't change during the home buying process. How much home a homebuyer could afford is based on their income at the time of purchase.
''The rule of thumb for housing expense is no more than 30 percent of gross income,'' said Ms. Alvarado. ''So if you're annual income is $60,000, then a homeowner's total annual housing costs shouldn't be more than $18,000 per year or about $1,500 per month. Going above that payment amount could lead to budget troubles down the road."
Basically, keeping an eye on the monthly payment limit means that a buyer could purchase more home if the mortgage rate falls or if the price of the home falls and less home if either one increases.
That leads to the next number: the level of mortgage rates. Higher mortgage rates mean higher mortgage payment amounts, whether the price of the home a person wants to purchase goes up or not.
''Mortgage rate are still lower than they were for most of the past 20 years, creating an opportunity for more affordable mortgage payments,'' said Alvarado. ''According to forecasts by economists and statements by the Federal Reserve Board, it's not likely that 30-year, fixed-rate mortgage rates will go much higher in the next 12 months.''
CHRIC advises homebuyers to work with a housing counselor to identify several mortgage lenders and then lock in the best mortgage rate for as long as possible at the lowest cost, allowing time to search for the right home. Registration for CHRIC First Time Homebuyer education classes is available by calling 753-4180.
Knowing the credit score number affects the mortgage rate. Lenders are slowly moving their credit score targets to levels where more homebuyers could access a low-rate mortgage. However, if the homebuyer's credit score is below the threshold, the mortgage will cost more, if a mortgage is available at all.
''That's why CHRIC is here to help consumers, not just homebuyers, understand what helps and hurts a credit score,'' said Alvarado. ''If a person can't come in to see us, we recommend caution when thinking about credit repair services. There are no quick fixes to credit issues.''
Another number that doesn't usually change overnight is a buyer's savings or money available for down payment. A survey by NeighborWorks America, a national nonprofit housing and community development corporation based in Washington, D.C., found that saving for a down payment is only second to saving for retirement. Even so, saving the thousands of dollars usually needed for a minimal down payment takes time.
''To help homebuyers close the time gap, we encourage them to seek out down payment assistance programs that may be able from us or other sources, as well as to retain a realtor who will negotiate for closing costs assistance from the seller if possible,'' said Alvarado. ''Closing costs are not the down payment, but having help here means less money from savings has to be used for the overall financing.''
For 36 years, CHRIC's mission has been improving the housing stock of Chautauqua County and the living conditions of its low-income residents. As a charted NeighborWorks organization, CHRIC provides leadership in strengthening communities and creating affordable housing opportunities for low and moderate income families. Over the past five years alone, CHRIC has created 82 new homeowners, saved 41 homes from foreclosure, developed or preserved 188 rental homes, assisted 1,202 total households, created and supported 105 total jobs, and provided a total direct investment of nearly $15 million in Chautauqua County.