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Hernando, Olive Branch, Southaven, Nesbit & Walls in Desoto County
Mississippi
Also Tate, Tunica and Marshall Counties |
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Pre-qualifying and
Pre-approval
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Q: |
What can I
afford? |
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A: |
Know what you
can afford is the first rule of home buying, and that
depends on how much income and how much debt you have.
In general, lenders don't want borrowers to spend more
than 28 percent of their gross income per month on a
mortgage payment or more than 36 percent on debts.
It pays to check with several lenders before you
start searching for a home. Most will be happy to
roughly calculate what you can afford and prequalify you
for a loan.
The price you can afford to pay for a home will
depend on six factors:
1. gross income
2. the amount of cash you have available for the down
payment, closing costs and cash reserves required by the
lender
3. your outstanding debts
4. your credit history
5. the type of mortgage you select
6. current interest rates
Another number lenders use to evaluate how much you
can afford is the housing expense-to-income ratio. It is
determined by calculating your projected monthly housing
expense, which consists of the principal and interest
payment on your new home loan, property taxes and hazard
insurance (or PITI as it is known). If you have to pay
monthly homeowners association dues and/or private
mortgage insurance, this also will be added to your PITI.
This ratio should fall between 28 to 33 percent,
although some lenders will go higher under certain
circumstances. Your total debt-to-income ratio should be
in the 34 to 38 percent range. |
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Q: |
What do I do
if I get turned down for a loan? |
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A: |
Increasing
numbers of loan applicants are finding ways to buy their
own home despite past credit problems, a lack of a
credit history or debt-to-income ratios that fall
outside of traditionally acceptable ranges.
Ask the lender for a full explanation, then appeal
the decision in writing. |
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Q: |
What is the
first step when looking for a home loan?
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A: |
Most experts
recommend that you should get prequalified for a loan
first. By being prequalified, you will know exactly how
much house you can afford. Almost all mortgage lenders
now prequalify people, and many of them can even do it
on the Internet. You also can do your own affordability
calculations; most recent consumer books on home buying
include steps to doing so, as do various real estate
Internet sites.
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Q: |
How do you
qualify as a first-time buyer? |
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A: |
In general,
lenders define a first-time home buyer as someone who
has not owned any real estate -- whether a personal
residence, vacation home or investment property --
during the past three years.
Lenders verify an applicant's status by examining
their income tax returns, checking to see that the
individual did not take any deductions for mortgage
interest or property taxes. |
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PRE QUALIFY
SITE MAP
Cara O'Bryant
Realtor Associate
Licensed
in Mississippi & Tennessee
901-212-0047
 Bob Leigh & Associates Realtors, LLC
6900 Cobblestone Blvd
Southaven, MS 38672
662-890-9696
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