Orleans and St. Tammany Parish Real Estate Professional

The debt-to-income ratio is, simply, the way that mortgage lenders decide how much money you can comfortably afford to borrow. It is the percentage of your monthly gross income (before taxes) that is used to pay your monthly debts (not your monthly living expenses). Two calculations are involved, a front ratio and a back ratio, written in ratio form, i.e., 33/38.The first number indicates the percentage of your monthly gross income used to pay housing costs, such as principal, interest, taxes, insurance, mortgage insurance and homeowners' association dues. The second number indicates your monthly consumer debt, such as car payments, credit card debt, installment loans, etc. Other living expenses are not considered debt. So a debt-to-income ratio of 33/38 means that 33 percent of your monthly gross income is used to pay your monthly housing costs, and 5 percent of your monthly gross income is used to pay your consumer debt - so your housing costs plus your consumer debt equals 38 percent.33/38 is a common guideline for debt-to-income ratios. Depending on your down payment and credit score, the guidelines can be looser or tighter, and guidelines also vary according to program. The FHA, for instance, requires no better than a 29/41 qualifying ratio, while the VA guidelines require no front ratio but a back ratio of 41.

What if you already have a house or don't plan to buy a house for a good period of time? You still need to know and control your debt-to-income ratio so you can avoid creeping indebtedness, or the gradual rising of debt. Impulse buying and routine use of credit cards for small, daily purchases can easily lead to unmanageable debt. Debt-to-income ratio not only affects your ability to buy a home, but other purchases as well. Debt-to- income ratios are powerful indicators of creditworthiness and financial health. Know your ratio and keep it low. Your consumer-debt number should never go higher than 20 percent regardless. If you let it rise above 20 percent, you may:

•·         Jeopardize your ability to make major purchases: cars, homes, and major appliances.

•·         Not get the lowest possible interest rates and best credit terms. Have difficulty getting additional credit in emergencies.

•·         If you keep a stranglehold on your spending habits and therefore your debt-to-income ratio, you can: make sound buying decisions, and refrain from frivolous credit purchases and loans.

How Much House You Can Afford

There are a number of factors that can contribute to the affordability of a house and, as a potential homebuyer, it's important that you know what type of mortgage payments are within your budget.   

Debt-To-Income Ratio

As a homebuyer, your first consideration will be the amount of your monthly mortgage payments.  If you owe a lot of debt, lenders may consider you to be a high credit risk, which makes debt-to-income ratio a leading factor in determining how much of a house you can afford.

Most lenders will discount any loans that you will have paid off within one year when determining how much of a home you can afford.  As a general rule, your mortgage payment should not exceed 25-30 percent of your monthly take-home pay.

Loan Term

Although you will end up paying more interest in the long run, you will find that you can afford a more expensive house if you request a loan term of 25-30 years, compared to a shorter term of 15 years.

Interest Rates  

When you look at an interest rate, all you see is a number.  Hopefully, it's a single digit that's comparable with current market rates.  Most homebuyers already know that their interest rate affects their monthly payment which, in turn, is determined by the borrower's income.  Lower interest rates mean that you can afford a larger principal loan amount, which means a more expensive house.

Credit History

Because your past credit history will play a large role in determining your interest rates, it will also impact the affordability of a house.  For instance, a buyer who pays six percent interest will save a considerable amount of money over a buyer who pays eight percent interest on their home loan.  It may not seem like much now but, when averaged over time, the savings could be tremendous.

Down Payment Amount  

Believe it or not, the amount of your down payment will not only show the lender how serious you are about buying a home, but it will also affect your ability to afford a particular house.  For instance, if you were to qualify for a home loan of $200,000, but your dream home was currently listed for $250,000, a down payment in the amount of $50,000 would get you into the home.

The above scenario is just an example, but it does show how a down payment can affect the price of the home that you are able to afford.  Some lenders may only require a five percent down payment, but you are free to pay as much above that as you wish.  A larger down payment can also reduce the principal loan amount, which thereby reduces the monthly mortgage payments.

Abita Springs
This small village was built around an old mineral spring that once served as a health resort for the Choctaw Indians. Today, you can drink to your health by sipping the cool, clear Abita Springs water at a Victorian-style pavilion.
Located at the intersection of Highways 36 and 59

Abita Brewery
Take a 45-minute tour of this brewery and see beer being made. Tours conducted Saturday at 1 p.m. and 2:30 p.m. and Sunday at 1 p.m.
21084 Highway 36, Covington
(985) 893-3143

Bayou Lacombe Museum
Located at the site of the oldest schoolhouse in St Tammany Parish, this two-room museum features historical artifacts, old tools and clothing items more than 100 years old as well as exhibits on the Choctaws. Open Sundays.
Lacombe
(985) 882-3043

Bogue Falaya Park
Located on the Bogue Falaya River, this park has a beach house, picnic shelters, nature trails, and fishing.
New Hampshire Street, Covington

Christ Episcopal Church
Located near the entrance of Bogue Falaya Park, this church is the oldest standing building in St. Tammany Parish. It was consecrated in 1846 and is surrounded by a quiet garden, which is open to the public.
New Hampshire Street, Covington

Historic Covington
This community features a variety of unique shops and antique dealers located in the historic downtown area.
Downtown Covington

Fairview-Riverside State Park
This 98-acre park, located on the banks of the Tchefuncte River, features a boat launch, campsites, a fishing pier, picnic areas, and a canoe trail.
Two miles east of Madisonville on Highway 22
(985) 845-3318

Fontainebleau State Park
The site of a former sugar mill plantation built in 1829 by Marigny de Mandeville, this 2,700-acre park embraces the shores of Lake Pontchartrain. The remains of the old sugar mill can still be seen. Camping is available year-round; the swimming pool is open during summer.
Highway 190, Mandeville
(985) 624-4443

Global Wildlife Center
Hundreds of endangered species from around the world roam these 900 acres. Tours are by covered wagon or on horseback. Open seven days a week from 10 a.m. to sunset.
Highway 40 West, Folsom
(985) 624-9453

Lake Pontchartrain Causeway
The worlds largest over-water bridge, this 24-mile-long causeway spans Lake Pontchartrain and connects St. Tammany Parish with New Orleans.
South of St. Tammany Parish
Accessible via Highway190

Lake Shore Drive
This drive is lined with many fine examples of historic architecture and old oaks.
Mandeville

Lee Lane
This quaint shopping area in Covington features two blocks of unique merchandise as well as local arts and crafts.
Covington

The Market
A cluster of shops in historic Covington where you'll find a variety of homemade and hand-produced items. Open seven days a week.
500 N. Thread Street, Covington
(985) 893-5278

Madisonville Lighthouse
Built more than 150 years ago, the Madisonville Lighthouse stands at the mouth of the Tchefuncte River and was used to signal boats navigating the waterway. It is listed on the National Register of Historic Places.
Madisonville

Madisonville Museum
This museum is located in the old Madisonville courthouse and jail. It features rotating historical exhibits. Open Saturday and Sunday noon until 4 p.m.
201 Cedar Street, Madisonville

Our Lady of Lourdes Shrine
Built by Father Francois Belay, this shrine, located at a beautiful spring, commemorates his vision of St. Bernadette.
Lacombe

St. Joseph's Abbey
This home for Benedictine monks was built in 1931. The cathedral walls are covered by murals by Belgian monk Dom Gregory de Wit. Open to the public daily from 8 to 11 a.m. and from 1:30 to 5 p.m.
Off Highway 25 on River Road
Five miles northwest of Covington

H. W. Smith's Sons Hardware Store & Museum
Housed in an old general store dating back to 1876, this museum features hundreds of local artifacts. Open Monday, Tuesday, Thursday, and Friday 8:30 a.m. through 5 p.m.; Wednesday 8:30 a.m. through noon; Saturday 8:30 a.m. through 1 p.m. Admission is free.
308 N. Colombia Street, Covington
(985) 892-0460

Tammany Trace                                                                                                                                                                          A 31-mile stretch of abandoned railroad line connecting the major municipalities of the parish, this trail will be converted to a linear park for hiking, jogging, cycling and horseback riding. The first portion of the trace, from Mandeville to Abita Springs, is open.
(985) 892-0520

Oak Harbor

Oak Harbor is a private gated community connected to Eden Isles and located just south of Slidell. It is currently made up of four sections connected by Oak Harbor Boulevard: the Fairways, the Inlets, Mariner's Cove, and Masters Point; a fifth area is currently being developed. The houses in Oak Harbor are located either on the golf course or on water, and many are on deep canals connected to Lake Pontchartrain.

Oak Harbor is perfect for commuters, with easy access to Interstate 10 and only about a half-hour's drive to downtown New Orleans. Much of the properties are upscale in the numerous privately gated communities.

Oak Harbor also features a four star Golf Course, as rated by Golf Digest, that is open to its residents. The professionally designed, and challenging, course contains eighteen holes and spans over 6,261 yards. The course also features a concession cart which makes frequent trips to relieve weary players. Further, play is enhanced with the "ParView Caddy System" which allows sportsmen to greater enhance their play experience with advanced course information and convenience.

Oak Harbor is in the Abney Elementary, St. Tammany Jr. High, and Salmen High school district

If you would like to find out more about this neighborhood or are interested in buying a house located here, contact Nakisha Brisco or visit www.PinkSkyListings.com

Stonebridge Estates

Stonebridge Estates is in a unique equilibrium between the majestic wild life and lazy bayous that encompass Louisiana and being located to a formidable city and benefiting from its various assets. Beautifully kept lawns and gardens serve as a coast to relaxing bayous and streams which are home to an assortment of wild life. To the south, is I-10 as well as Country Club Estates. Meanwhile, to the east I-59 is ready to serve the residents with their transitory needs in and around Slidell, and New Orleans.

If you would like to find out more about this neighborhood or are interested in buying a house located here, contact Nakisha Brisco or visit www.PinkSkyListings.com

Willow Wood

Willow Wood is in the Cross Gates section close to shopping, restaurants, recreation, medical facilities and schools. Homes range from 5 to 20 years old.

Willow Wood is in a growing area of Slidell with low traffic. The subdivision is a mixture of age groups and has an active homeowner's association. A popular athletic club located nearby features a pool, weight facilities, and tennis courts.

The excellent school district includes Cypress Cove Elementary (kindergarten and first grade), Honey Island Elementary (second and third grade), Little Oak Middle (fourth through sixth grades), Boyet Junior High (seventh and eighth grades), and Northshore High School.

If you would like to find out more about this neighborhood or are interested in buying a house located here, contact Nakisha Brisco or visit http://www.pinkskylistings.com.