Are you a resident of Chicago who is in the market to take out a home mortgage loan? Although the credit crunch is affecting almost all the sectors of the economy, the mortgage industry is not an exception. Have you asked yourself ‘I want to buy a new house how much can I afford’ before entering the mortgage market? Well, Chicago is the city of meetings and conventions and the main industries in Chicago are commercial, finance and transportation. However, the mortgage market and the housing market also play a key role in developing the economy and earning revenue. The interest rates on the 30 year fixed rate mortgage loans are at 4.07% and this has remained constant for a long period of time. The 15 year fixed rate mortgage is now at 3.35% and if you want to secure a mortgage loan within your means, there are some things that you need to know. Check them out.

Boost your credit score: When you go to a mortgage lender in Chicago and ask for a mortgage loan, the first financial document that he will check is your credit score. No lender will give you a loan without checking your score as this is the most important document that speaks about your financial worthiness. If you can show a good credit score, it is most likely that the mortgage lender will ensure that you can make timely payments on the loan. This assurance will make them charge you low rates on the loans.
Augment your monthly income: The next step that you can take is to augment your monthly income to grab the lowest mortgage rate possible. If your monthly income is not enough, the mortgage lender may think that you can’t manage all your debt obligations with the income that you make in a month and assessing a higher risk, he may charge you higher interest rates. Therefore, look for ways to boost your monthly income so that you can attain a favorable interest rate on your loan.
Lower the amount of debt you owe: You must lower the number of debt obligations that you have against your monthly income. There is a ratio called a debt-to-income ratio and with a higher DTI ratio, it is most likely that the mortgage lender will charge you high rates as he will think that you can’t repay so many loans with the small amount of income that you earn. Take solid steps like consulting a professional company who can help you repay debt. With a lower debt-to-income ratio, you can get a mortgage loan within your means.

Thus, if you’ve thought of buying a new house in Chicago and you want a new mortgage for it, you must first ask yourself ‘I want to buy a new house how much can I afford’ before deciding the loan amount. Also take the above mentioned steps to ensure grabbing the best loan in the market.


Christine Hancock is a full time Realtor with over 10 years of experience. Working with Prudential Rubloff , one of Chicago’s oldest and most respected full service Real Estate companies , we offer leading edge technologies and personalized marketing strategies to get your home sold. For more information visit http://www.getanewhome.net where you can search for a new home, find out what the house next door sold for or get up to the minute mortgage info. Call Christine Hancock, Broker Associate 312-296-9300, and you’ll be home in no time!