Realty.com » Resources and Services

Login • Register

Resources and Services

Consumer Guides

Mortgage Hints

Don’t build yourself a mortgage mountain. It’s fine to want the best home you can afford, but be certain that it is comfortable affordability. Although you may find certain mortgage lenders who will stretch your qualification ratios (the ratio of your total mortgage payment to your total income) the traditional ratios--the mortgage payment as 28% of your income and the total of your mortgage payment plus your monthly debt payments as 36% of your income--are good basic guidelines.

Get your budget under control. Spending some time reviewing your budget (or developing one if you don’t already have it) and sharpening your money saving skills can bring big rewards later. A coordinated budget allows you to get the most home for your money without strapping yourself while eliminating wasteful spending.

Prepare to pay off small debts. Having 3 credit card balances, for example, one with a $125 balance, a second with a $165 balance and a third with $275 balance will only cloud the picture. Even though the total is only $565, all 3 will have minimum payments, credit lines, etc. If possible, prepare to pay them down to $0 balances.

Begin to gather documentation. It is not necessary that you have all items on hand before you apply, but there are a number of documents you will need eventually and the approval process will go much smoother if you begin to gather them now. Examples: W-2’s and income tax returns from the last few years (especially if you are self-employed), copies of pay stubs, a copy of your credit report (you can get a free copy of your credit report here), records of any child support or alimony (either going out or coming in) and bank statements for all accounts (checking and saving) for the last several months.

Don’t forget about closing costs. In addition to your downpayment, you will need to reserve funds for closing costs. Depending on the type of loan and your location, these costs can range from 3-5% of the mortgage amount, will be paid in cash at the closing and cannot be borrowed funds.

Compare. There are lots of sources for mortgage funds--be sure to make comparisons. Your local bank or credit union, mortgage brokers and Internet resources are all available. Be certain to compare equal terms, downpayments and loan types.

Consider points when comparing. Your total mortgage cost will be determined by 3 factors: The interest rate, the term and the amount of points.

Consider a 15 or 20 year term. Many home buyers make the assumption that a shorter term will boost their payments out of reach. Unless you make the comparison, though, you may never know if a 15 or 20 year (if available) term could have been affordable. See a comparison of a sample loan. If you are concerned about committing to the higher payment of a shorter term, try this tactic: Mortgage the home with a 30 year loan but have the lender develop a 15 and a 30 year amortization sheet for you. Then, do your best to pay the mortgage at the shorter term payment. It will do wonders for your equity position!

This article courtesy of The Home Buyer’s Information Center, a complete guide to buying a home. 2002

More Popular Entries

Additions & Remodels

Remodeling Opportunities in the Kitchen
Details Make Home Offices Work
Reinvent Your Home

Agents (Real Estate), Appraisers & Home Inspectors

Condominiums
Glossary of Real Estate Terms
House Buying Mistakes

Appliances

Repair Dishwasher and Water Damage
Remove Rust From Water
Tip: Cleaning Dishwasher Stains

Builders (New Homes), Architects & Designers

More Return on Your Home Improvement Investment
Checklist: Recommended Questions to Ask a Contractor
Checklist: Questions to Ask Your Architect

Carpentry & Cabinets

Tip: Repair Laminate Countertops
Steel vs. Wood Framing
Reface Cabinet

Cleaning Services

Breathing Better in Your Home
Tip: Cleaning Fireplace Burns
Choosing a Maid Service

Concrete, Brick & Stone

Specialty Finishes for Concrete Patios and Other Flatwork
Installing Masonry Flatwork
Pouring Concrete Driveway or Walkway

Consumer Guides

Remodeling Increases Value
Planning Small Plumbing Installation
Window Replacement

Design Ideas

Remodeling Opportunities in the Kitchen
Choosing Between Blinds or Shades
Patios for Living

Electrical, Telephone & Data

While You’re Away
Generator Repair
Illuminate Your Kitchen

Expert Advice

Window and Door Solutions
Refinishing Hardwood Flooring
Moisture Build-up on Windows

Flooring

Carpet Types
Damaged Tiles
Ceramic Tile

Handyman Services

The Benefits of Weatherstripping
Find a Handyman for Small Repairs
What Happened to the Handyman?

Heating & Cooling

Understanding Boiler Radiator Systems
Installing Central Heating
Checklist: Cold Weather Survival Tips

Home Construction

Do-It-Yourself Compared to Hiring a Pro
Timber Framed Homes
Understanding Pre-manufactured and Kit Homes

Landscape, Decks & Fences

Landscape Design
Using a Tree Stump Removal Service
Find a Garden Hose

Moving & Storage

Stowing it Away: Where to Put It
Finding a Truck Rental Service
Checklist: Hiring a Real Estate Agent

Other Services

Assessing Storm Damage
Tents for a Special Occasions
Checklist: Protect Your House from Fire

Painting & Staining

Exterior Painting
Quality Paint Jobs
Planning for House Painting

Plumbing

Install a Water Heater
Install a Solar Water Heater
How to Hire a Plumber

Quick Tips

Tip: Repair a Septic System
Checklist: Childproofing Your Home and Yard
Tip: Repair Concrete Steps

Roofing, Siding & Gutters

Ventilation is Key to How Long Your Roof Will Last
Tip: Roof Leaks
How to Buy Roofing

SP Feature Article

The Internet Will Change the Buying of Services

Walls & Ceilings

Understanding Plaster
Drywall Panels and Sheets
Drywall Installation Techniques

Windows & Doors

Window and Door Solutions
The U-factor of Thermal Replacement Windows
Security Bar Install

copyright 2008 Realty.com