2 Words: Monthly Payment.
As long as I've been helping First Time Buyers I have zeroed in on ONE important component of the Home Buying process as a way to guide my clients: MONTHLY PAYMENT. There's something to be said about buying a home with a mortgage payment you can afford.
In the current market with economic conditions providing a disturbing sense of uncertainty, monthly payment is more important then ever. When I started out as a Mortgage Banker in 1989, 30-year Fixed rates were ranging from 11-12%! When I bought my first home in 1992, my 20-year Fixed rate was 9.625%! You could say I've seen it all when it comes to interest rates, but one constant holds true throughout my career of working with First Time Buyers: Focus on Monthly Payment and you can't go wrong.
Here are some articles from my personal mortgage advice blog about MONTHLY PAYMENT:
It's All About Monthly Payment
Use A Blanket Thats Big Enough
How To Buy A Home: Preparing To Go Out There
Trevor Curran NMLS#40140
When we were looking for a home we gathered all the information necessary to provide to our bank officer or mortgage broker.
There are many sites to determine the proper documentation but the obvious ones are 2 years of tax returns, W-2s/1099s and current pay statement. Have copies of your bank/brokerage and other assets available.
Lending officers after running credit and reviewing these documents can provide an accurate approximation of the amount your are eligible to borrow.
As an aside, be wary of firms promising to repair credit issues for potential borrowers.
Bonnie Chernin and Dave Rogoff
Fillmore Real Estate Br#19
2926 Avenue J
Brooklyn, NY 11210
917-593-4068 (David Mobile)
646-318-5031 (Bonnie Mobile)
We have already answered this question. email me directly or call me and I will give you some names
of mortgage people and once we have a preapproval and maximum you can afford we can hit the streets
to find your dream home.
We do free pre-qualifications in my office. All you need to bring with you are your W2's from '08 and '09, social security card, 2 months worth of paystubs and your last 2 bank statements, and any other tax return forms reflecting income and investments. You sound like you are in a good postion to buy, granted you have a good credit score.
Just a bit of advice when you want to buy property with rental units. Take your time and find good tenants. I would strongly recommend that you go through a broker to help you. It doesn't cost you anything and we do all the screening, employment and credit checks. Keep in mind that you will have a tenant (people) first and income second, it is a lot of responsiblity. If anything goes wrong in the apartment and its not fixed right away, TENANTS WILL STOP PAYING THE RENT!!!! And you also have to be able to pay the mortgage in full if they do not pay..
If you would like to schedule an appointment for a free pre qualification, don't hesitate to call me at the office @ 718-692-4444.
Licensed Real Estate Professional
You've received some excellent advice here. We enjoy working with first time homebuyers and would be happy to help you explore your options, and even assist you if you need a referral to a mortgage banker or broker. Please feel free to call us at the numbers below.
David Rogoff & Bonnie Chernin
Fillmore Real Esate - Branch 19
917-593-4068 - David mobile
646-318-5031 - Bonnie mobile
The first step is to call me.....718332-8800 --seriously, you must first contact a mortgage person to get qualified so you know how much house/condo/coop you can afford. start with your own bank and then call a few others.
I can giveyou some names if you want them. then when we have that figure we can start looking.
I live in Brooklyn and work in NJ.. When a mortgage lender qualifies you for a mortgage they allow you to use 33% of your gross annual income for a monthly mortgage payment (PITI-principal, interest, taxes, & insurance). There are of course exceptions. Witha 70K down payment, if your credit is better than 720, you are a good candidate for a conventional loan. If it's less, FHA may be the way to go. The only way to know for sure is to talk to a bank, broker, or mortgage banker. Just work with someone you someone you feel confortable with and stay in your comfort zone. Feel free to call me if you have any questions.
Mortgage Loan Originator
You need to speak to several mortgage bankers and see what they can offer you. This is also known as getting yourself pre-qualified. When you meet with the mortgage bankers, in order for them to properly pre-qualify you, you will need to show them your last two years tax returns and/or W-2 forms, recent paystubs, last three months bank statements and also have them review your credit report. This is the only way you will be able to get definitive answers.
When you go to the first bank and they run your credit report, ask them for a copy of it which you can then bring with you to the other banks so they will not have to repeatedly run your credit as this can lower your credit score if done too often.
When you meet with the banks you want to find out what type of mortgage programs they have to offer you, what type of interest rate they can give you and how much your closing costs will be. You also want to ask if there are any points attached to getting that interest rate (a point is an additional fee that is equal to 1% of the loan amount) and if you can lock in the interest rate (for how long and is there any cost)?
In the end you need to figure out what your monthly costs for the mortgage, real estate taxes and insurance will be in order to see if you are qualified. This is also known as PITI and is the number the banks use to see if you are qualified based on your income. Lets say you borrowed $300,000 with a 30 year fixed mortgage at 4.5%. Your monthly mortgage payment would be $1521.00. If you purchased a home here in Brooklyn in this type of price range your monthly real estate taxes and insurance would be about $350.00. Also, if you purchase a property and go less than 20% down you will have to pay what they call Private Mortgage Insurance (PMI), this would be equal to about 0.55% of the loan amount, so if you borrowed $300.00 and had to get PMI that would add $137.50 to your monthly expenses and PITI. Hence, with PMI your monthly expenses would add up to $1,958.50. If that is within your personal budget, you can spend up to $350,000.00 for a house based on the fact that you have $70,000.00 saved up right now. Keep in mind that you will have closing costs of about 5% of the loan amount (at $300,000 your closing costs would be about $15,000.00).
In order to qualify for a loan like this you would probably have to have an income of about $60,000 per year that you report to the IRS. If you do not have this type of income of if you want your monthly payment to be lower, you would have to borrow less money. When you pre-qualify yourself with a mortgage banker you will get all the answers based on your qualifications and then you can figure out how much you can spend to purchase a home. At this point in time you would want to look at all the homes that are at or near your price range and see if any of them meet your wants and needs.
If you need further assistance please let me know. I can help you every step of the way including introducing you to good mortgage banker(s) and showing you homes. Good luck!
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Cellular: (917) 805-0783
The internet has made our world much smaller. You can shop and find excellent deals for everything via the web, including mortgages that are not local.
Scott Miller, Realty Associates, Boca Raton, FL
Please see my blog for more tips and advice on getting a mortgage
With respect to buyer's agency, if you use a buyer's agent, that agent is legally able to advice you about what to offer on a particular property and devise a negotiating strategy that should save you money. If you go to the listing agents on particular properties, it is their job to get the most money out of you for their clients, the owners. I would be pleased to meet with your to discuss your needs. Good luck!
Certified Buyer Representative
Senior Real Estate Specialist
Century 21 Princeton Properties
Top 2% of Century 21 agents nationwide!
Matt T. Weaver
WCS Lending, LLC
Cell:561.212.6503 7 Days 8am-9pm
NMLS ID #175651
Scott Miller, Realty Associates, Boca Raton, FL
Contact me offline at Gail@GailGladstone.com and I will be happy to refer you to someone who can run the numbers for you and help you position yourself to attain your dream.