Financing
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Finance Overview
Many factors influence your financial options and the financing programs best suited for your financial position and goals. Your monthly gross income, monthly expenses, down payment, credit history, savings, and employment history all have a direct impact on the different programs you may qualify for. Pre-qualifying your financial options has become an important first step in the real estate buying process.
Our sales consultants are well versed on the various loan programs available today in order to assist buyers in the purchase of real estate in our area. Our network with various mortgage brokers, lenders, and financial institutions can help save you time and determine where to find the best rates and programs available today. CLICK HERE for a confidential consultation. If interested, we can help you determine your best financing options and arrange for a quick and convenient loan pre-approval.
How Much House is Affordable?
Most mortgage companies use qualifying rations to determine how much they will lend you. Two common ratios used are 28/36 and 29/41.
The first number in the ratio represents the percentage of your monthly gross income (income before any deductions) that the lender would consider acceptable as a monthly mortgage payment. For example, if you make $2,500 per month, the bank may consider a $700(2,500 x .28) per month mortgage payment including principal, interest, taxes, and insurance.
The second number in the ratio considers your debt. Your total debt should not exceed this percentage of your gross income. For example, if you make $2,500 per month, as above, the bank may like to see your total debt under $900(2,500 x .36) per month.
The more debt you have, the less you typically qualify for.
The Pre-approval Process
A pre-approval is a guarantee that you can qualify for financing to a maximum purchase price and loan amount. In a competitive environment, being pre-approved could mean the acceptance of your offer rather than another buyer's offer on a house you may become interested in.
Many factors influence your financial options and the financing program best suited for your financial position and goals. Your monthly income, monthly expenses, available down payment, credit history, savings, and employment history all have a direct impact on the different programs for which you may qualify. Pre-qualifying your financial options have become an important first step in the real estate buying process.
If you are interested in using a prequalification calculator to estimate how much you can afford, CLICK HERE. If you would rather meet with an agent to get pre-approved at your earliest convenience, CLICK HERE.
Mortgage Pre-approval Checklist
- W-2s for the past two years (or complete tax returns if self-employed)
- Most recent pay stubs covering the last 30 days
- 12 months of mortgage payment receipts or cancelled checks
- Last 3 months bank statements of all checking, savings, and asset accounts
- Names, address, and account numbers of all creditors
- Certificate of Eligibility (VA loans only)
- Residency information for the past two years
- Copy of student transcripts for full-time student within the past 2 years