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Checking Your Chimney Caps
While you are cleaning leaves out of your home’s gutters, dealing with Christmas lights, or adjusting a satellite dish, don’t forget to check on your chimney caps while you’re on the roof. Chimney caps are those mesh-sided enclosures (usually...
Choosing a Bed for Your Dog
Does your dog enjoy sleeping with you at night? Although cuddling with a pet can keep owner and dog warm and snuggly, keep in mind that most animals are not as clean as people, nor do they always follow the same sleep patterns. A dog can track...
First Steps In Real Estate Investing
With all the stories of people making tremendous amounts of money in real estate it's no wonder why so many are looking at real estate as an investment vehicle. It offers more security than the stock market, provides great potential returns, offers...
How To Choose Locking Mailboxes
Do you need a decorative, quality, recessed locking mailbox
for your home? There is a large selection of mailboxes from
which to choose, and you may wonder which is the right
mailbox for you. A recessed locking mailbox is a perfect
way to keep...
Tips To Reduce Your Home Insurance Costs
All homeowners are looking for ways to reduce our home insurance costs. Costs continue to rise and budgets get tighter and tighter with each passing year. Here are 8 tips to reduce your home insurance costs.
1. Increased Home Security
Most...
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Prerequisites While "Qualifying For a Home Loan"
When preparing to lend a mortgage the first thing many lenders do is to make sure about your financial condition. It enables lenders to grant loans that would otherwise be considered too risky. Lenders look at a variety of factors, including your ability and willingness to repay the loan. This mainly is done by the complete verification of borrowers application, which involves various factors.
They are as following: (http://www.mortgagefit.com/loan-application.html)
a. Your identity.
b. Your income- The amount of money you earn will determine the amount of money you can borrow to purchase your home. Normally, 33% of your income is the general rule to be spent on your mortgage, but this can vary depending upon the amount of down payment, your credit history, etc.
c. Your debts- The lender will look at the debt paid monthly by the applicant.
d. Your employment history- Lenders see a steady employment in any occupation held by the applicant.
e. Your credit history- Lenders receive a copy of your credit history in the loan application process in order to determine your willingness to pay as a borrower.
f. The value of the property you want to buy or refinance.
g. Your financial assets and liabilities.
Your willingness to repay is closely related to how you have fulfilled previous financial commitments. This is why lenders also place an emphasis on a pair of numbers called the "housing ratio" and the "total-obligation ratio."
Housing ratio- It is the percentage of your gross monthly income that you will need to spend on housing expenses after you buy the new home. It includes-
a. Your mortgage payment
b. Taxes
c. Insurance and maintenance
Lenders generally want to see a ratio of 28% or lower.
The total-obligation ratio- It is the portion of your income that goes to covering both your housing expenses and any
other obligations, such as credit cards, car loans and child support. Your lender will want to see a ratio of 36% or lower.
Other qualifying prerequisite is the down payment. Traditionally, lenders have required a down payment of at least 20% of the purchase price of the home. However, lenders now accept less amount if the borrower takes out private mortgage insurance. The larger the down payment, the less your home costs in the long run. Besides there are many other documents requires by mortgage lenders. They are:
1. Federal tax returns from the previous two years.
2. W-2 forms from the previous two years.
3. A recent paycheck stub that shows your name and Social Security number, the name and address of your employer and your year-to-date earnings.
4. Documents to show other sources of income, which could include a second job, overtime, commissions and bonuses, interest and dividend income, Social Security payments, VA and retirement benefits, alimony, child support.
5. A complete list of your creditors, such as credit cards, student loans, car loans, child support payments, along with the minimum monthly payment and the balances.
6. Investment records including mutual fund statements, real estate and automobile titles, stock certificates and any other investments or assets.
7. Canceled checks that show your rent payments, or mortgage payments if you already own a house and are shopping for a new one.
Thus when all these are approved, you get the green signal from the mortgage lender. Mortgage lender then provides you the mortgage financing for buying the home of your dreams.
If you have any other queries related to mortgage, feel free to visit this site http://www.mortgagefit.com.
Copyright Lance Williams - http://www.mortgagefit.com
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