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Home Buyer's
Guide |
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| How
Much Can I Afford? |
| You've
Found The Perfect Home. What Next? |
| Applying
For a Mortgage |
| Approving
Your Loan Application |
| Coordinating
Settlement |
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| How
Much Can I Afford? |
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- A crucial step in finding the right home is
to first determine how much you can afford to
spend on your new home. First, let's calculate
an affordable monthly payment. To calculate
this value, we will use a housing-expense ratio
of 33%. This means that 33% of your monthly
income can be spent on mortgage payments, including
property taxes and insurances. Take your gross
(before taxes) income each year and divide by
12 to determine a monthly income. Multiply the
monthly income by 33% to calculate an estimated
monthly mortgage payment.
(gross income)/(12)=(monthly income)X(0.33)=Estimated
Monthly Mortgage Payment
Example: Bob earns $60,000 a year. Therefore
his monthly income is approximately $5000. If
he has a housing-expense ratio of 33%, his monthly
mortgage payment will be $1650 (5000 X 0.33).
- Now, to determine the price of a house you
can afford, choose an interest rate between
7.500% to 10% and use this mortgage calculator.
- After you have determined the affordable cost
for your new home, it is important to contact
real estate brokers in the area which you are
planning to purchase a home. They can provide
you with listings for houses available in your
price range and which suit your personal needs.
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| You've
Found The Perfect Home. What Next? |
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- Once you have found a home to purchase, it
is time to contact the seller. Sometimes the
seller will be an individual, or they may be
a representative of a real estate agency. Make
your offer on the home based on the amount that
you can afford.
- The real estate broker will contact the seller
with your offer and negotiations can begin.
The buyer and the seller must reach an agreement
for the sale price of the home. This part of
the process involves the drawing up of a sales
contract.
- Once the seller and the buyer agree on a price
for the home, they must both sign the ratification
of the sales contract.
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| Applying
For a Mortgage |
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| It is now time to find a loan program
to suit your financial needs as a buyer and as a
homeowner. Go ahead and fill out the preliminary
loan application ONLINE! American Mortgage
Consultants will find the best loan program to fit
your needs. Working with a mortgage broker, such
as American Mortgage Consultants, will benefit
you by providing you with a wide range of mortgage
options such as: Adjustable Rate Mortgages, Balloon
(Payment) Mortgages, and Fixed Rate Mortgages. Finding
the best rate and the best mortgage payment program
is an essential step in buying a home because it
can save you thousands of dollars.
Let's establish a loan amount of $80,000.00.
This will be considered a conforming loan. The
rules for conforming loans apply to loans of less
than $227,150.00. Jumbo Loans cover loan amounts
between $227,150.00 to $650,000.00.
Mortgage brokers can offer you various programs
such as 30 year fixed or 15 year fixed, each with
fluctuating rates. Each type of mortgage program
has benefits depending on the buyer's financial
situation and preference.
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| Approving
YourLoan Application |
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| It is now up to American Mortgage
Consultants to get your loan approved. A standard
fee of $357 is required to pay for the appraisal
of the property and the credit report. You should
engage the services of a licensed title agent to
perform the settlement process. All of the supporting
documents are gathered by our professional loan
processors to be sent to the lenders. Such documents
shall include the uniform loan application, a verification
of employment, a credit report obtained from the
credit bureau, the appraisal, a copy of the sales
contract, a verification of the deposit fee (for
the downpayment), and other documents. These are
prepared for review by the underwriter.
The lender's underwriter will review the information
pertaining to your loan and will decide whether
to approve, deny, or suspend your loan. The underwriter
reaches this decision depending upon your house-expense
ratio, debt-to-income ratio, credit history, employment,
property appraisal or loan-to-value ratio, and
any compensating factors that exist.
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| Coordinating
Settlement |
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Congratulations, your loan was approved! It is
now time to make arrangements for settlement,
the closing of your loan. After the approval of
the loan, there may be conditions to be satisfied
before closing. These conditions should be handled
at least a week before the closing date.
Our closer at American Mortgage Consultants will
contact the settlement agent you have chosen to
check on the progress of the work they have done
for you. Within a week of your chosen settlement
date, you will be contacted by your settlement
agent to inform you of the exact costs necessary
to close the transaction.
Settlements generally run very smoothly and last
about 60 minutes. You will be required to sign
numerous documents relating to the purchase or
refinancing of your property. Your settlement
agent will be able to answer any questions regarding
the documents, and American Mortgage Consultants
will be happy to assist you in any way possible.
We are happy to have guided you through the loan
process. We hope to be of further assistance to
you when you need us next.
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