HOME MORTGAGE LOANS
If you are shopping for a home today, you might be interested in the
following, helpful information about mortgages and obtaining them.
A home loan typically is the largest debt a consumer incurs. Choosing
a mortgage is a big decision and has many variables to consider.
One of the big mistakes home buyers make (particularly first time
buyers) is underestimating the expenses related to home
ownership---including maintenance and repair costs, property taxes and
homeowners insurance. These can catch up with you and lead to possible
credit problems. Still, owning a home is part of the American dream
and is a great goal to reach, both personally and financially. People
rarely lose money by owning a home.....usually make money if and when
they decide to sell. Home ownership generally tends to improve the
financial circumstances and attitudes of people. Once you've analyzed
all of the costs associated with your new home, you should have an
idea how much you can afford to pay each month for your mortgage, and
before you start shopping for a home, you're ready to talk to
potential lenders.
QUALIFYING RATIOS
Keep in mind, lenders look at "qualifying ratios" because they want to
know what percentage of your income you will be spending on a monthly
payment.
The front Ratio compares your monthly income with your house payment.
Most lenders want to see a ratio of 28% or lower, meaning that you'll
be spending no more than 28% of your monthly gross income on your
mortgage.
The other ratio is the "back ratio" which considers your house
payment, plus all other monthly debts, like auto loans, credit cards,
etc. Not too long ago, a back ratio of 36% was the limit, but today
most lenders have loosened the restrictions somewhat.
When you start shopping for a mortgage, you should contact more than
one potential lender to compare interest rates and other terms
associated with the loan.
Start by researching mortgages through:
> your bank or credit union, > other banks that offer mortgages > on line lenders > mortgage brokers.
A large number of consumers choose to shop through a mortgage broker
since they have access to loan offered by many banks. A good broker
will find you the best deal, considering the property, your
preferences and your credit score. Once you have made that decision,
be sure to obtain a pre-approval letter from your lender prior to
house hunting. Based upon current interest rates and your credit
history, a pre-approval letter is a binding commitment to lend you the
money for your mortgage.
Many potential buyers are in possession of a pre-qualification letter,
which merely states that based upon information you have given them
(without having checked your credit) you qualify for the loan.
Our advice is to seek a binding, pre-approval commitment letter,
especially if you are buying in a hot real estate market, where it may
be necessary.
GOOD LUCK WITH YOUR HOUSE HUNTING.
For all your Real Estate and Insurance needs and helpful hints,
contact LEGACY REALTY GROUP, "the new star in town", Edison, NJ.
732.744.0400
If you are shopping for a home today, you might be interested in the
following, helpful information about mortgages and obtaining them.
A home loan typically is the largest debt a consumer incurs. Choosing
a mortgage is a big decision and has many variables to consider.
One of the big mistakes home buyers make (particularly first time
buyers) is underestimating the expenses related to home
ownership---including maintenance and repair costs, property taxes and
homeowners insurance. These can catch up with you and lead to possible
credit problems. Still, owning a home is part of the American dream
and is a great goal to reach, both personally and financially. People
rarely lose money by owning a home.....usually make money if and when
they decide to sell. Home ownership generally tends to improve the
financial circumstances and attitudes of people. Once you've analyzed
all of the costs associated with your new home, you should have an
idea how much you can afford to pay each month for your mortgage, and
before you start shopping for a home, you're ready to talk to
potential lenders.
QUALIFYING RATIOS
Keep in mind, lenders look at "qualifying ratios" because they want to
know what percentage of your income you will be spending on a monthly
payment.
The front Ratio compares your monthly income with your house payment.
Most lenders want to see a ratio of 28% or lower, meaning that you'll
be spending no more than 28% of your monthly gross income on your
mortgage.
The other ratio is the "back ratio" which considers your house
payment, plus all other monthly debts, like auto loans, credit cards,
etc. Not too long ago, a back ratio of 36% was the limit, but today
most lenders have loosened the restrictions somewhat.
When you start shopping for a mortgage, you should contact more than
one potential lender to compare interest rates and other terms
associated with the loan.
Start by researching mortgages through:
> your bank or credit union, > other banks that offer mortgages > on line lenders > mortgage brokers.
A large number of consumers choose to shop through a mortgage broker
since they have access to loan offered by many banks. A good broker
will find you the best deal, considering the property, your
preferences and your credit score. Once you have made that decision,
be sure to obtain a pre-approval letter from your lender prior to
house hunting. Based upon current interest rates and your credit
history, a pre-approval letter is a binding commitment to lend you the
money for your mortgage.
Many potential buyers are in possession of a pre-qualification letter,
which merely states that based upon information you have given them
(without having checked your credit) you qualify for the loan.
Our advice is to seek a binding, pre-approval commitment letter,
especially if you are buying in a hot real estate market, where it may
be necessary.
GOOD LUCK WITH YOUR HOUSE HUNTING.
For all your Real Estate and Insurance needs and helpful hints,
contact LEGACY REALTY GROUP, "the new star in town", Edison, NJ.
732.744.0400
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