02
Oct
By support
Home Mortgage Tips

Setting Your Budget: How to Analyze Your Finances to Determine How Much Mortgage You Can Afford

Setting Your Budget: How to Analyze Your Finances to Determine How Much Mortgage You Can AffordWhether you’re buying a home for the first time or you’ve decided it’s about time that you upgraded to a larger, more expansive house, if you’re making a real estate purchase you’ll need to be aware of how much you can reasonably afford to borrow in a mortgage. In today’s post we’ll take a look at a few ways that you can analyze your financial situation to help decide how much mortgage you can truly afford.

Prepare An Honest Monthly Budget

The first step in understanding how much of a monthly payment you can afford is to create an honest monthly budget which includes all of your family’s income and spending. Although you won’t have to pay them every month, it’s also important that you include costs that show up irregularly like car repairs, Christmas gifts or tuition bills as these still need to be paid. The more information you can place in your budget, the more accurate your financial picture will be.

Your Down Payment Plays A Huge Role

As you might imagine, the amount you can invest in your down payment plays a significant role in how much mortgage financing you will need. Every dollar that you can place in your down payment today is one less dollar that you’ll need to borrow and pay interest on over the amortization period of your mortgage. Take some time to consider how much you can put down, and see if there’s any way you can bump this figure a bit higher.

What Interest Rate Will You End Up Paying?

Small changes to your mortgage interest rate can have significant impacts on how much you are required to pay back over the life of your mortgage. As you’re shopping around, be sure to consider how long your interest rates are valid for and try to determine the lowest rate you might qualify for. You may also find it helpful to use an online mortgage calculator which can help you to understand how your interest rate impacts your monthly payments.

Consult A Mortgage Professional To Learn More

While building a quick budget to analyze your family’s expenses is easy, factoring in all of the various items that a lender will consider might be harder than you expect. If you have questions about the mortgage process and whether or not you’re ready financially, contact your local mortgage professional today.

23
Sep
By support
Home Mortgage Tips

Turned Down for a Mortgage? What to Do if You are Declined – and How to Get Second Opinion

Turned Down for a Mortgage? What to Do if You are Declined - and How to Get Second OpinionIf you have been declined for a mortgage, you may think that buying that new home is out of reach. However, there are ways to turn a rejection into an approval and to find a more accessible loan. Here are just a few steps you can take to learn about your loan options and get the mortgage that works for you.

Find Out Why The Mortgage Application Was Denied

The first step to getting a second opinion is to find out why your mortgage application was denied. Banks commonly deny mortgages for reasons like a low credit score, a high debt-to-income ratio, or concerns about the applicant’s past and present employment status.

To qualify for a mortgage, most lenders want to see someone with a credit score of 640, a debt-to-income ratio of less than 43 percent after the mortgage is included and at least 30 days in your current position if using wage income to qualify for the loan.

Not All Lenders View An Application The Same Way

A good reason why it is worthwhile to ask for a second opinion about your ability to get a loan is because no two lenders will view an application the same way. For one lender, a credit score of 650 is insufficient for getting a loan – but another lender might be more than happy to offer you a mortgage with a score of 650. To get a second opinion, you may wish to talk to a mortgage broker who will be able to scan a variety of loan programs to find one that works for you.

There Are Ways To Find Down Payment And Closing Cost Assistance

Those who have a low credit score or other questionable metrics may be able to qualify for a loan by offering a larger down payment. While a first-time buyer may not have the cash on hand to make a larger payment, there may be programs that provide grants or low-interest loans that can be used as part of your down payment or to help pay closing costs. With this extra money, it may be possible to overcome lender objections and obtain a mortgage.

If your mortgage application has been rejected, it doesn’t mean that you can’t get a mortgage from another lender. If you’re ready to buy a house but just need to clear the mortgage approval hurdle, there are ways to get a leg up.

17
Sep
By support
Home Mortgage Tips

Speeding Up the Close: Five Tips on How to Close Your Mortgage Loan Faster So You Can Start Moving In

Speeding Up the Close: Five Tips on How to Close Your Mortgage Loan Faster So You Can Start Moving InWhen a seller accepts an offer from a buyer, the process of obtaining the property has just begun. The buyer now has to conduct an inspection, get approval from an attorney and obtain a mortgage – all of which can be time consuming. Here are a few ways that you can speed up the mortgage process and close the deal sooner.

Make Sure That You Have Money For Closing Costs

Do you have the money needed for a down payment and to pay other closing and prepaid costs? If not, you won’t be able to close until you find the funds to pay those costs – and this could delay the closing on your home indefinitely. Before you arrange the mortgage, make sure you have enough cash on hand to pay closing costs.

Get Conditional Approval Before Making The Offer

If you have not been conditionally approved for a loan before making an offer, you can’t be sure that a lender will give you a loan for the amount of the purchase price. In addition, starting the process from scratch could push back the closing timeline. Having your mortgage conditionally approved means the mortgage process is already underway when you make your offer, which saves you time.

Have Your Documents Together

Get your bank statements, pay stubs and other documents together before the seller accepts your offer. Having everything that the lender needs right away decreases the time needed for a lender to assess your application before extending the loan.

Work With An Experienced Mortgage Lender

Your mortgage lender may be able to move everything along by staying on top of the loan approval process. By ensuring that documents are being processed in a timely manner, an experienced lender can reduce the closing time from months to weeks.

Create A Timeline For Repairs The Seller Is Obligated To Make

It is not uncommon for a seller to be obligated to fix certain issues with the house before the new owner takes possession. However, it is important to put these repairs the contract along with a mandatory completion date. Otherwise, the seller could drag his feet with no contractual obligation to finish any repairs before he sees fit to do so.

Closing on a home loan can take anywhere from 30 to 120 days depending on work that needs to be done on the home and how well prepared a buyer is. Contacting and working closely with your mortgage lender or broker can result in a speedy and painless close. Contact an experienced mortgage professional today for more information about closing a mortgage.