Buying
Your
Katy-Cinco-Ranch-Richmond Area
Home
For
The Best
Price!
Chapter
7
Fred Miller, Realtor serving Katy, Cinco Ranch, Pecan Grove, Richmond, Westpark Tollway, Fulshear. www.RichmondKatyHomes.com
Fred Miller, Realtor serving Katy, Cinco Ranch, Pecan Grove, Richmond, Westpark Tollway, Fulshear. www.RichmondKatyHomes.com
Mortgages:
We Can Crunch The Numbers
For You, If You Like!
Are
you "math phobic"? Would you rather do ANYTHING than sit down with a calculator
and a bunch of financials?
We can do this
for you. We work with several good lenders who do this for a living every day.
Some basic information regarding your income and monthly bills are necessary to
calculate your debt service ratio. You will also have to divulge you credit
rating. You can talk about this in general, but it is best to run a credit
report on you and your spouse.
It is always a good idea to get fully PRE-APPROVED for a mortgage before you
start looking seriously at homes--wishing to purchase within the next three
months. If you are planning to buy soon, it is time to sit down with a
professional and get all of this work done up front.
Pre-Qualify
- vs - Pre-Approval
Pre-Qualifying
is a process performed by a lender to determine:
a)
how much you can afford to buy, and
b)
which loan options work best for you.
Pre-Approval
is a loan commitment from the lender for the exact dollar amount of loan you
will be granted, pending the selection of your dream house.
It
is like having cash in your hand when you make an offer. Some sellers require a
letter of approval before considering an offer, and will call the lender to
verify.
Pre-Approval
Process
The
lending company will review and verify the following:
The
maximum loan amount the Loan Officer is requesting.
Your
credit report and your credit score.
The
amount of your income and your cash in the bank.
After
careful review, the lender will provide a written loan commitment.
A
pre-approval letter is worth it's weight in gold!
It
will allow your agent to tell the Seller: "Take my client's offer seriously." It
says "My client has the financial capacity to close this deal!"
Down
Payment
VA
(Veteran's Administration) loans require no down payment.
FHA loans
require a 3.5% down payment from either personal funds or a gift from a family
member or "grants program". FHA is more lenient on credit scores, and the loan
is government backed. Seller can pay up to 6% of the sales price for buyer's
closing costs.
Conventional
loans require 5% to 10% down payment and is influenced by your credit score.
You may get the seller to contribute toward down payment and closing costs. This
varies from lender to lender, so if cash down payment is a problem, the lender
must know in order to help you. Even let the lender know if you plan to get a
gift from a relative for a down payment.
Your
Interest Rate
Your credit
score will determine which loan programs will be available to you. FHA requires
a credit score of 580 or more depending upon additinal factors. FHA can be more
lenient since you have to put 3.5% down. Your interest
rate also will be influenced by:
FICO
score
What Bernacke
had for breakfast….
Amount
of Down Payment
Debt
to Income Ratio
Term
of the Loan
Qualifying
For A Mortgage Loan
Qualifying
For The Loan, or proving to the lender that you are a good credit
risk.
Background
Information: The parent lender employs an Underwriter who reviews the proposed
loan to make sure that it can be sold on the Secondary Mortgage
Market.
Credit
Factors Considered
Your
Credit History
Your
ability to repay debt obligations.
Your
willingness to repay debt obligations in a timely manner
If
you have not bought much on credit, you should be proud of yourself. On the
other hand you have not established credit, or enough credit. When this happens
even one or two bad things on your credit report can destroy your credit because
there is nothing to "counter" this effect. Buy some things on credit, then pay
them off rapidly. This will leave you with "lines of credit" that look good and
they cost you very little. Just be disciplined.
Your
Income
Your
house payment is not to exceed 33% to 55% of your gross income
What
is your house or rental payment now?
What
will be your new house payment?
The
smaller the increase, the more favorable to the lender
Your
current debts
What
is your current debt load? What is your "debt to income" ratio?
(Lender
restriction: spend no more than 33% to 55% of your income on debt service. FHA,
VA may allow up to 45%)
We try to operate by referral from clients. We strive to provide such great service that our clients will recommend us to friends, co-workers, family and acquaintances--over and over.
How do you benefit from this philosophy? Our business depends on giving you such top-notch service that you will sing our praises to anyone you know who is looking for a Realtor. Most of our business is referred to us by past clients. If we don't maintain our high standards and ensure that referrals keep coming our way, most of our business will disappear. The health of our business depends upon our quality of service! Clients benefit from this because we devote more time to their needs instead of spending lots of time and money looking for new customers (the conventional approach).
Many realtors do business as though they will never see you or hear from you again. This mind set can lead to shoddy service because the realtor just wants to close a deal and move on to the next deal. These realtors don't build trust with their clients and are afraid of losing them, so they push their customers into decisions that may not be in their best interest just to get the deal done. They rely on advertising to constantly bring them a steady stream of new customers.
We view our relationship with our clients as a long-term association; we regularly stay in touch with them. We prefer to get to know the people we work with because it creates such a rich and personally rewarding work and personal life for us.
The more we know our clients the better we can serve them. Many times we have counseled clients not to buy a particular property because of a too high price, poor location or condition. We strive to tell the truth, then live with the consequences. We have found most people prefer us to work this way in the long run.
Why are we willing to wait so patiently? We are in this business to stay--good times and bad. Whether you buy now or in a few months or years from now makes no difference to us. We want you to proceed at a pace that is comfortable to you. If you can always count on us for unbiased, professional advice and learn to trust and respect us, then you are more likely to recommend us to other people who are as nice as you are. Once again it all comes full circle.
.
The information contained
in this site is the opinion of Fred Miller and does express any policy or
opinion of Re/Max International, Rd/Max of Texas or Remax
Plantation.
Fred
Miller, Re/Max Plantation, FredMiller9@gmail.com , www.RichmondKatyHomes.com,
Office receptionist: 281/342-2288 Cell 281/924-2531Blog eBook Chapter 7 . Mortgages
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