The District Chronicles

Issue date: 8/3/08 Section: Business

Next, you have no savings. To qualify for the financing option mentioned above, I would recommend that you save an amount equal to three months of principle, interest, taxes and insurance (known as "piti"). Since you pay $1,250 a month in rent, my guestimate is that you could afford $1,800/month for your mortgage payment, factoring in the mortgage interest tax deduction you will receive as a home owner. So, I would recommend that you save about $5,400 to meet this reserve requirement.

Ultimately, though, you will only have to put $500 of your own money into the transaction, assuming the seller will cover all the other closing costs.

Since it will take some time for your credit scores to recover and to save money, I recommend that you spend the time going to open houses in a modest price range, talking to the realtors you meet there, signing up for some on-line listing alerts to be e-mailed to you, and do some reading on home buying. There is a lot of work to do before you begin looking for a realtor. The work ahead of you is hard, but it is very achievable. Good luck!

Jessica White, also known as "Ms. Mortgage Maven," is a mortgage consultant with Tenacity Mortgage, a division of Tenacity Group, the Capital region's leading financing, real estate advisory and tenant condominium-conversion company. Call or email her to discuss your home purchase or refinancing needs. She can be reached at 202-607-4449 or Jessica@msmortgagemaven.com. You can also apply online at www.msmortgagemaven.com.

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