Home Refinance Calculator: Mortgage and Loans - Mortgage Refinance, Home Loans

Tuesday, May 10, 2011

Posted: 10 May 2011 04:09 AM PDT

A debt will let you achieve your lifestyle goals like buying your family home on a mortgage. Most home-buyers don’t have the available cash to get their homes outright and ordinarily use a bank or financial institution to lend them that amount of money for it. When your loan application is approved, you will then execute a mortgage agreement in favor of the bank guaranteeing the repayment of the loan using the property purchased.

Is it possible to afford a mortgage?

Borrowing money to obtain your home ought to be a major decision that will require a careful examination of your allowance. You’ll need to know how much you earn and spend monthly, and how much cash you could have left for paying your monthly amortizations.

Your capacity to repay is a crucial criterion lenders consider when looking for your loan application. Typically, lenders check out 2 qualification ratios— Gross Debt Service Ratio (GDS) and Total Debt Service Ration (TDS).

Both ratios compare your monthly income against your monthly debt obligations. GDS shows how much within your monthly income may be reasonably set aside for your mortgage payment while TDS shows a greater picture because it measures simply how much of your monthly household income could be put aside for your total debt obligations including the proposed mortgage payment.

Lenders usually act favorably on a GDS ratio of round 28 to 32% and a TDS ratio of around 36 to 40%.

Deposit: While a lender may finance your real estate purchase, you will still have to provide a portion of the purchasing price in money in what is referred to as a deposit or downpayment.

How much you’ll provide as downpayment will depend on the terms of your lender but this could be between 5 to 20% on the total price of the property.

As a rule, the larger the deposit, the less your house costs in the end because with a smaller debt, interest costs are lower and can soon add up to significant savings in the long run. A larger downpayment will likely end up in smaller monthly obligations or possibly a shorter amortization period.

Mortgage broker: When shopping for a lender, most of the people use the assistance of a mortgage broker. This agent is usually a real-estate financing professional who focuses primarily on matching loan wholesalers and loan products to borrowers.

Your following step after approaching a mortgage agent is to get a pre-approved mortgage which is an interest-rate guarantee issued by a lender for a specified time period, usually 60 to 90 days. Most real estate professionals require that you have one before you take you around prospects.

The 4Cs of Mortgage Underwriting

Posted: 10 May 2011 02:23 AM PDT

WIth Spring upon us, and new buyers out looking for houses, I thought today might be a good time to review the basics of what lenders look for as they decide to approve (or deny) mortgage applications. Ron Siegel is a Radio Show host on the Real Estate Radio Network and counsels clients in all matters Real Estate Related – Mortgage Banking, Real Estate Purchases and Sales, Short Sales, Foreclosures, Credit Repair. Reach on Ron Siegel at Ron@MBEhoa.com – 800.306.1990 — www.MBEhoa.com.