Archive for June, 2013

Qualifying For a Mortgage – How Much Can I Afford?

Saturday, June 22nd, 2013

 

 

 

 

 

 

 

 

Key Components

Components of a mortgage payment include the principal (dollar amount of loan) and the interest cost, taxes and heat. These figures combined equal your mortgage payment.

Insurance

Sometimes other costs, such as insurance payments and Homeowner’s Association (HOA) fees can be included as part of the mortgage payment. Borrowers must obtain fire insurance prior to closing on a home, but the payments may be made in a lump sum or can be paid for separately. If you borrow more than 80% of the home value, you will also be required to pay for Private Mortgage Insurance.

Taxes

In many cases, mortgage companies escrow monies to use for paying property taxes and homeowner’s insurance. These payments are often included as part of the mortgage loan payment, but sometimes a borrower can opt out and pay the fees to the parties directly.  Whether you pay them as a part of your mortgage payment or pay them independently, be sure to include the expenses when determining your total monthly expenses.

Mortgage Calculators

To determine the maximum amount a borrower is eligible for, a mortgage broker will use one of several calculators or formulas to help you decide the mortgage payment you are comfortable paying and if your income is sufficient to satisfy a lender. To see the Averbach Mortgages calculators, click here.

Other Debt and Expenses

Other costs that should be considered to determine how much you can afford to borrow include property taxes and payments for other debts such as credit cards. When determining your total monthly payment, you would be wise to include your monthly expenses for telephone, electricity, water and cable as well as any other regular payments you make.

The more accurate and complete information you provide your mortgage broker, the better he or she will be able to match you with the lender that will best be able to meet your needs.

 

If you have any questions about the steps necessary to pre-qualify for a mortgage please give Justin (604-736-1855 ) a call or fill out the form on our Contact Us page.

Common Reasons Your Mortgage May Be Declined

Sunday, June 9th, 2013

 There are numerous reasons your mortgage may be declined. Some of them are more obvious than others. The home that you plan to purchase will be collateral for your mortgage loan. If the home you want to buy doesn’t appraise for the amount you hope to borrow, the bank will decline your mortgage application.

Your credit rating could be lower than the lending institution guidelines allow for a mortgage loan. If you have late payments on credit cards, have defaulted on loans in the past or even if you have several credit cards with high balances, you may be denied a mortgage loan. Another possible reason for your mortgage being declined is that you are asking to borrow more than you can afford to repay.

All mortgage brokers use standard guidelines for determining whether or not you are a good credit risk. Each loan type and lending institution has specific criteria and/or requirements. In other words there are rules that must be followed when determining not only whether or not you are likely to make your mortgage payments on time, but also whether or not the institution feels you can reasonably afford to repay your loan.

You must provide all documentation needed for the type of loan you are seeking. Historical proof of income, evidence of other sufficient financial resources a credit score above a certain number and other criteria will vary from loan to loan. If you fail to let us know about retirement funds or other financial assets, for example, we won’t have a full picture of your financial resources. The more we know, the better we are able to represent your best interests.

Underwriting criteria can vary among lenders and since our job as mortgage brokers is to be familiar with a wide range of financial institutions, we are able to find a suitable fit and help you choose the best mortgage for your needs.

If your credit history is causing problems, we will let you know what you have to do to repair your credit rating, and what you will need in order to qualify.

If you have any questions about the steps necessary to pre-qualify for a mortgage please give Justin (604-736-1855 ) a call or fill out the form on our Contact Us page.