Report 1
How Expensive of a Home Can You Buy?
- Rule of thumb: you can afford a house that costs up to two and one half times your annual gross income.
- Buying power depends on how much you have available for a down payment, the interest rate, and how much a lender will agree to lend you.
- Lender will primarily consider two factors in determining loan amount: your earnings and your existing debt.
- Lender's qualifying guidelines: your monthly costs (including mortgage payments, property taxes, insurance, and homeowner's dues on a condo) should total no more than 28% of monthly grow income. Monthly housing costs plus other long term debt (and debt that will take longer than 10 months to pay off) should not total more than 36% of monthly gross income. Ratios can be higher, 33/38 with some loan programs.
- If monthly debt payments are excessive, this will reduce the amount you can borrow. 8% of total monthly income is considered acceptable.
How Can You Increase Your Borrowing Power?
- Reduce your existing long term debt.
- Find a financing option that results in a lower down payment and lower monthly mortgage payments.
Use Our Mortgage Calculators
Report 2
What an Agent Will do for You
The average person assumes that a Real Estate Agent's job is to help find a property, but that is only the beginning. After locating the property that suits you best, the Real Estate Agent continues with the negotiation of the offer and acceptance of the purchase and sale agreement. The agent will assist you in selecting appropriate financing for your needs, coordinate the transaction to closing, and ultimately present you with the keys to your new home.
- Summary of Basic Real Estate Principles
- Review of contracts
- The Process of buying a home
- General Lending Information:
- Highlighing loan programs
- Mortgage application
- Closing cost estimation
- Selection and Research of Qualifying Properties:
- Viewing properties
- Area information
- Inspection Procedures:
- Negotiating the Purchase
Report 3
Selecting an Agent
DOES the agent return phone calls promptly? This simple question is a good screening strategy. Time is of the essence in a real estate transaction and you need to know your agent is serious about following up.
DOES the agent explain information and processes so you understand? This attribute is especially important for first-time buyers since there are so many different industry terms used between real estate agents, mortgage brokers/lenders, and legal forms.
DOES the agent seem ready to spend time with you? One agent may be busier than another, but a good agnet is generally orgainzed and has systems in place to insure your needs are met.
DOES the agent offer assistance with financing and suggest other properties if a particular property doesn't meet your needs?
DOES the agent suggest an intitial session in the office, rather than meeting you at the property you phoned about? To receive superior service, it's important that you spend some time with your agent so there's an understanding of your needs.
DOES the agent ask questions about your finances soon after meeting you? This may not be good manners in ordinary relationships, but it is the mark of an effective agent who aims to give you good service and meet your needs.
DOES the properties suggested by your agent show that he/she has been listing and understands your wants and needs? If you are being shown homes with the wrong number of bedrooms, or if the homes are clearly out of your price range, the agent has not been listing.
DOES the agent seem conversant with local conditions? Does he or she have maps of the area, handouts about schools, property tax rates, etc.?
DOES the agent seem knowledgeable? Even the most experienced agents do not know everything, but they should be able to answer most of your questions. An experienced agent will admit that he/she does not know, and will find out the answer as soon as possible.
Tell us about the property you're looking for by filling out our Dream Home form and we'll follow-up within 24-hours.
Report 4
What You Should Know About Your Credit
People throughout the nation are discovering that their credit report contains some surprises. Therefore, it's a good idea to get your free yearly right to your free credit report since it's an important part of your mortgage lender's approval.
What's on a credit report? Your credit report will list your payment history for virtually any account that you have ever had. Open, inactive and closed accounts are all reported by creditors. Expect to see a payment history on these accounts. In addition, reports also show court records on divorce decrees and judgements, accounts placed for collection, and employment and personal data. Information is maintained for 7 years.
Who has access to your credit file? A credit company accesses your credit file whenever you apply for credit, when you accept an offer to open an account, or when your credit line is increased. Each inquiry shows on your credit report.
Don't these companies need your authorization? Not necessarily. Some charge card companies ask the credit bureau to run a match against guidelines they develop. The company never sees your entire credit report, they are only told wheter you fit thier profile. If your credit profile matches thier guidelines, you may end up with a direct mail solicitation, as well as an inquiry on your credit report. Can you prevent this? Yes, by contacting the credit bureaus and informing them that you do not want your credit file available for pre-screening.
Who reports the information and how is it reported? Companies that extend credit are probably reporting your credit history to one, or perhaps all 3 bureaus. If there is misinformation on your credit file, you'll need to contact the charge company reporting the misinformation in addtion to each of the 3 credit bureaus. Credit bureaus keep track of all inquiries on your file.
How does a lender use this information? On the basis of your payment history, the types of accounts you have, your credit limits and your outstanding balances, lenders use a credit report to evaluate risk. With the report, they will examine your ability and willingness to pay by answering the following questions: Do you have sufficient income to support the additional debt? Have you recently acquired additional debt? Have your outstanding balances or credit limits increased lately? And, regarding that inquiry on your report...your mortgage lender will probably ask you to explain it.
If there's incorrect information on the credit report, how can you get it removed? First contact the company reporting the late payment. Some companies will correct the situation by sending you a letter, while others will want you to write a letter. In any event, be prersistent and insistent. Any time you call about late payments being reported, write down the name and phone number of the person with whom you spoke. Ask how long the process will take, then mark your calendar for follow-up. Keep in mind that the Fair Credit Reporting Act guarantees the consumer certain rights, including the right to dispute a credit rating. Credit bureaus and agencies are obligated to re-investigat any item(s) you dispute and to resolve them within 30 days. If the disputed information is not researched within that time frame, is found to be inaccurate, or cannot be verified, the derogatory entry must be removed. If the reinvestigation does not resolve the dispute or if it is determined that the derogatory must stay with the credit report, you can file a brief statement to be included, setting forth a summary of the dispute.
View our links page for credit bureaus |
