MLSs

F.A.Q.'s

There are several factors lenders take into consideration when determining how much they will lend you for your home purchase.  The four most important factors are your income, your debts your credit and down payment.  Any one of these factors can greatly impact the amount of mortgage you qualify for. Lenders are primarily concerned with the percentage of your gross monthly income going towards your new monthly housing expense plus your other monthly debts.

As a general rule, no more than 28% of your gross monthly income should go toward your monthly housing payment and no more than 36% of your income should be going toward your monthly housing payment plus other monthly debt. These guidelines vary by the amount of your planned down payment and the loan program chosen. If you have been pre-qualified and are not satisfied with the pre-qualification amount, I list the four most common obstacles to qualify for a home loan and some possible solutions to each.

Excessive Long-Term Debt

·         Consolidate your debts by utilizing a consolidation loan, paying off your bills.

·         Pay off long-term debts, using some of your cash thus enabling you to make a larger down payment.

·         Selling an asset to pay off debt is another option.

Inadequate Income

·         Income from alimony, child support, bonuses, overtime or future raises might be considered to qualify. If you've overlooked any income, be sure to tell your loan officer.

·         Find a co-mortgagor who is willing to go on the loan with you.

·         Make a higher down payment.

·         Consider a financing option which will allow you to stretch your purchasing power, such as FHA loans, adjustable-rate mortgages, balloon financing or a graduated-payment mortgage.

Credit Problems

·         Repair your credit file by contacting creditors and requesting negative information be removed.

·         Pay off outstanding judgments, liens and collections.

·         Re-establish good credit.

Lack of A Down Payment

·         Seek CalHFA and the many government assistance programs - on line.

·         Get a gift from an immediate family member

·         Sell or borrow against an asset.

·         Borrow against or cash out your 401K.

·         Ask the seller to contribute towards closing costs.

·         Obtain a low-point or zero-point loan.

·         Consider financing options that offer lower down payments and help with closing costs.