Since home prices and interest rates have drastically reduced, first time home buyers may finally be able to afford that home that they have been saving for! As of December, first time homebuyers only need a median household income of roughly $35,000 to purchase a home in the low to mid $100,000 bracket!

With a good credit score and a 10% down payment plus closing costs, qualifying for a mortgage loan should be relatively easy at this point. There are many loan programs out there to help first time homebuyers, some of which will offer thousands of dollars above the mortgage price for repairs that may be needed if purchasing a distressed home. A good rule to follow to determine how much house you can really afford is by calculating 28% of your monthly gross income. The number that you come up with should be the total that you spend on your mortgage including insurance and taxes.

Ginnie Mae, a government backed loan agency has a simple home-loan calculator that can aid in your search to determine what you can afford; having this information before you sit down with a loan officer will make you little more comfortable.