First-time Homebuyer Purchase Plan
James Ferguson
President/Mortgage Loan Originator
TN.NMLS ID# 2470           NMLS ID# 55481

Office: (931)906-1489
Mobile: (931)237-1356
Fax: (931)906-0757
Toll Free: (866)906-1489
120 Center Pointe Drive, Ste 4  
Clarksville, TN 37040

If you want to request your own first time homebuyer purchase plan packet, email

Section A: Begin By Determining Your Potential Loan Amount

Ten Steps to Estimating Your Current Home Purchase Power


What is your current gross (pre-taxed) monthly household income? $____________________

What is the sum of all of your monthly household debt payments (car loans, credit cards, student loans)? $_______________________________

The most common qualifying guidelines allow you to devote 25-30%1 of your gross monthly income to your mortgage payment (principal, interest, taxes and insurance or PITI) and 38 -50% of your gross monthly household income to your combined debt payments (mortgage, car loan, credit cards, etc.)


mortgage payment between

$______________________ and $ .____________________________

Using the above qualifying guidelines for your income and debt, it appears you could qualify for a total (PITI) monthly


How long do you expect to live in your home? (Average is 5-7 years) ____________years


Using the information above and for the purpose of this plan, the following estimate will be based on the current interest rate of ________%2 for a _______-year________ rate loan.



$_______________________ and $ .______________________

Based on the information provided, an estimated loan amount for this type of mortgage would range between

(Please note the range could be different for other types of loans)


How much in savings/investments do you currently have ready to use for a home purchase? $____________________________


Where were you thinking of buying a home?_____________________________


approximately $_____________________

In this area, closing costs generally run______ % of the mortgage amount. The closing costs and prepaids will be

Prepaids are that part of your loan closing costs which must be collected at closing to cover taxes, interest and insurance.


may add to your monthly payment costs. We can discuss financing alternatives and also find out if you qualify for a down

payment assistance program.

That appears to leave you with enough money to make a down payment of approximately $_______________If this amount is less than 20% of the home purchase price, you may need to pay for private mortgage insurance which



An estimated mortgage amount range, plus anticipated down payment, gives you an idea of a home purchase price

Lower price range estimate:

Mortgage amount $___________________

+ Down payment $___________________

= Purchase price $___________________

Higher price range estimate

Mortgage amount $____________________

+ Down payment $______________________

= Purchase price $_______________________




There are programs available with expanded qualifying guidelines. The example uses 25-30% and 38-50% as an illustration only. We can discuss other


The actual annual Percentage Rate (APR) for this loan will be higher to reflect the total cost of the loan. We cannot calculate the APR at this time.

Section B: Look At The “Big Picture” Cost Of Homeownership

There’s your mortgage payment:

A. Principal and interest $_____________________________________


(gradual repayment of the amount borrowed plus the interest charged for the

B. Property tax $______________________________________

(estimate as _____% of your purchase price for an annual cost)

C. Homeowners Insurance $______________________________________

(annual coverage costs to protect your home from hazards can be estimated as______% of the home’s value)

D. Mortgage Insurance $ _______________________________________

may be available)

(may be required if your down payment is less than 20%; financing alternatives

E. Homeowner Association Dues $ _________________________________________

(common fees for condominium, co-ops and townhome owners)

Total Mortgage Payment

The lender looks at your total monthly mortgage payment to see how it balances with your monthly income. They also will

look at your total monthly debt (like credit cards and other loans) to see how that debt, plus your total monthly mortgage

payment balances with your monthly income.

To get yourself comfortable with your monthly expenses, you should also keep the costs of managing a home in mind.

When you are ready to place an offer on a home, have your real estate agent ask the seller for a copy of the home’s utility

bills. Also, when you have your home inspection, be sure to discuss what repairs need to be done immediately with the

inspector and get estimates.


Please remember that your estimated purchase price range is based on:

range could potentially be higher.

Current interest rates. If rates increase, your range could potentially be lower. If rates decrease, your purchase price

Your current income. If your household income were to increase, your purchase price range could be higher.

purchase price range could be.

Your current savings. The more money you have saved and the larger your down payment, the higher your


One product type. If you choose or require a different type of mortgage loan, your purchase price range could

your other debt (such as auto, student and personal loans and credit card balances) allowing you to devote 38% to

50% of your pre-tax monthly income to your total monthly debt, depending on the loan product.

Your estimated mortgage payment. Most mortgage guidelines consider your estimated mortgage payments PLUS

Section C: Talk About Credit

Your credit history and debt obligations are important factors in your ability to be approved for a mortgage. The good news

is that there are different kinds of mortgage financing available – even for those with credit challenges or more than the

average debt. Of course, if you have good to great credit and little debt, there may be benefits like low interest rates and a

reduced amount of paperwork.

It would be inappropriate to speculate about your ability to be approved until you are ready to make a formal loan

application. But it is highly recommended that you look into your credit while you are still in the home purchase planning


Have you seen your credit report lately?

You can request one free credit report per year from each of the credit reporting agencies by contacting


Equifax Experian Trans Union Corporation

1-800-685-1111 1-888-397-3742 1-877-322-8228

improve it.

You can also go directly to the Fair Isaac Corporation (FICO) for your credit score and guidance on ways to

Calculate your monthly debt obligations

Review your monthly debt to see if, when combined with your estimated monthly mortgage payment, it falls between 38%

and 50% of your pre-tax monthly income.

If your monthly mortgage payment plus your monthly debt payment is greater than 38%-50%

work to reduce your debt. Start by targeting credit cards with the highest interest rates.

before taxes, you should

Stay Motivated. Keep your Credit In Good Shape.

believe are inaccurate.

Check your credit report at least twice a year for errors, including account activity and late payment entries you

receipts and explain the error in detail. By law, they must review your account and respond to you in writing within 30


Write a letter to the credit agency and the creditor if you find any errors. Include copies of any cancelled checks or

Pay your bills on time.


If you have a lot of debt, you may want to target one or two high interest rate accounts and work on paying those off

every month.

If you have a limited credit history, apply for a credit card and use it for small purchases, paying off the balance in full

Section D: Set Purchase-minded Goals

What if you don’t think you can purchase the home you want even with little or no down payment?

Think of your first home as a stepping stone to the home of your dreams and consider looking into one or more of the

following alternatives.

Homes in lower priced areas

Smaller homes with less land or fewer amenities

“Fixer-upper” homes

Condos, co-ops or two family homes

Whether you need more money to qualify for a mortgage or to be able to buy a more expensive home, setting hard and

fast savings goals is one way to get there.

Wait until you’ve saved more money

Prepare To Go The Distance

Total Amount You Think You Need:

$ _____________________________________(including closing costs, down payment and a savings cushion)

Your Current Savings:



$___________________________________________________________ (depending on your circumstances, this is how much you may need to save)

Purchase Date Goal:


Number Of Months Away:


Monthly Savings Goal:

$___________________________________________________ (move closer to your goal month by month)

Find A Home You Can Purchase

Do you know if there are homes in this price range in the area where you would like to buy?

Have you checked online at

Here are some Realtors® who can help you look for a home in this price range:

1. _______________________________Phone Number_________________________

2.________________________________ Phone Number_________________________

3._________________________________ Phone Number________________________

â–¡ Yes â–¡ Noâ–¡ Yes â–¡ No

Stay Motivated. Take Money-Saving Steps!

Open a dedicated savings account to save for your first home purchase

You could choose to have a set amount automatically deposited in the account every month including:


A reasonable portion of your paycheck


Money you’ve been spending on non-essentials


Money you receive from raise or a bonus





Some aspiring homebuyers qualify for local down payment assistance programs.

Here are some area programs to look into: