Most people don’t have enough money to pay cash for a home, so they borrow what they need from a bank or mortgage company.
To determine if you qualify for a mortgage, a lender will check your credit history and other personal information, including your income and how much you owe to creditors. In addition, the lender will order an appraisal on your property to determine its value.
In today’s marketplace lenders usually require buyers to cover at least 5% of the purchase price with their own money for conventional loans. The 5% is your down payment and you will be borrowing 95% of the purchase price which is called a Loan To Value.
For most of us, the interest you pay on the mortgage is tax deductible, so you save money on your income tax. Also, the property taxes that you pay will be deductible thus saving you even more money at tax time.
PLEASE CONSULT YOUR TAX ADVISER TO SEE IF YOU QUALIFY.
Even though home prices have fallen recently in most markets, the value of a home historically has increased over time creating wealth for you. Every month a portion of your payment will go towards the principal loan balance thus reducing the amount you owe and creating equity. The amount of principal applied to your loan balance increases each month until your loan is totally repaid.
You can get pre-approved for a loan before you start looking for a home — something we think every prospective home buyer ought to do.
Elite Mortgage Capital will evaluate your application and provide a “Pre-Approval” letter that says how much you would qualify for. Here’s a step-by-step look at the pre-approval process.
Full approval can only come when you have a contract on a home, all information stated on the application is verified and the value of the home is validated. Since the home will serve as collateral for the loan, the bank or mortgage company you choose to work with will evaluate that as closely as it does your finances.
Getting pre-approved for a loan is a very smart thing to do.
When you start shopping for a home, you can use your Elite Mortgage Capital “Pre-Approval” letter to show the sellers of the property how much financing you qualify for and that your credit has been checked and verified. It makes your purchase contract easier than someone who hasn’t taken this step.
Yes. He/She would be considered a “non-occupying co-borrower.” Being a cosigner makes him 100% responsible for the payments if you default on the loan. If you are late making a mortgage payment, that would also show up as a negative on their credit report as well as yours.
Our mortgage calculators will give you close estimate on what your qualifying loan amount would be and what your payments will be. The calculator will ask what your interest rate will be. For this, please see our “Today’s Rate” page under “Rates” in the main menu. Enter an average of some of the rates offered. You’ll get a pretty good estimate of the price range that fits your budget.
Whether you’re buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.
When couples apply together, lenders use their lowest credit score to determine whether they qualify for a loan and what interest rate they’ll pay.
It won’t have an impact if the two scores are 740 and 720. But it will make a huge difference if one spouse’s score is 740 and the other is 580. A low score would place a person in a higher-risk of default category in a lenders mind thereby impacting the interest rate and down payment required.
Most lenders don’t want your total debt payments — including mortgage, auto loans, student loans, child support and credit card bills that will take more than six months to pay off — to exceed 36% of your pretax income. (FHA loans allow for a slightly higher percentage.)
The APR is a way to reflect the total cost of a loan over time once all of the points, fees and other costs are taken into account.
That cost is expressed as an annual percentage rate that will be higher than the interest rate shown on your note and should allow borrowers to compare loans that have different interest rates and fees. The closer the APR is to the note rate the better the deal.