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One of the best ways to automatically increase your negotiating
power, when placing an offer on a home, is by providing the
seller with a Pre-approved Loan Letter. This letter shows
what amount you are approved for a mortgage. This also helps
you and Diana once you start looking at homes so that we won't
waste time looking at homes you won't be qualified for and
you'll be in a strong position to make an offer as soon as
you find something you like.
Selecting the best financing package available is as important
as finding a home that meets your needs.
There are three factors to consider in determining how much
you can afford:
Down payment
Most loans require some down payment. If you are able to
make a down payment of 25 percent or more, you may qualify
for special mortgage programs offered by a variety of lenders.
Ability to qualify for a mortgage
Many lenders require that your monthly mortgage payment,
including principal, interest, taxes and insurance, should
not exceed 28 percent of your gross monthly income. They also
expect your total installment debt including the proposed
monthly mortgage payment on your new loan, not to exceed 36
percent of your gross monthly income.
In addition to your gross monthly income, lenders review
your employment history, stability, and potential for increasing
your income. They also evaluate any additional income, such
as bonuses, commissions and child support.
They will request a credit report to verify your debt repayment,
outstanding debt, and available credit. They will calculate
your assets, including checking and savings account balances,
CDs, stocks and bonds.
Avoiding any late payments on credit accounts, and limiting
your credit purchases, helps keep your credit report in good
standing. If you have items on your credit report that could
negatively influence your ability to secure a mortgage, be
prepared to explain each situation in writing. You should
also consider delaying major purchases until after you've
moved into your new home.
Closing costs
Closing costs typically range between 2 and 5 percent of
your loan amount. These fees are due in cash at the time of
closing, or, in some cases, can be included in the loan.
If you would like to learn more about financing options,
please contact me or call you local lender.
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