The prospect of buying a new home is exciting, but what happens when you aren’t qualified for as much as you hoped? In a post pertaining to new rules about mortgage qualification, Dean Graziosi discusses how the qualified residential rule affects buyers.
According to an article in the Washington Post, “Regulators initially defined qualified residential mortgages as those with at least a 20 percent down payment and no more than a 36 percent debt-to-income ratio.” This can make buying a home a little scary, especially for someone who has never done it before.
When you begin your home hunt, you need to find out how much you will most likely be able to spend on a home. This is what is known as pre-qualification. This involves talking to a mortgage professional who can then run your credit and provide you with an amount. This is what you will need to base your property searches on. For example, if you are pre-qualified for $150,000, it would not work in your favor to look at homes selling for over $300,000 since the odds of you talking the home seller down to half the asking price would be impossible. Knowing what you will most likely be able to spend will help narrow down the homes you actually view and bid on.
Also when beginning your search for a new home, you’ll want to make sure your credit is in good standing. This is what will help you become qualified for a higher amount, along with your sallary and other stipulations. The better your credit score, the higher the pre-qualification amount. Less debt will also give you more money to put on a down payment and monthly house payments.
Dean Graziosi points out that risk sharing is addressed in the new qualified residential mortgage rules. This new change could potentially make lenders responsible for at least a part of risky loans. This could also make it more difficult for buyers to obtain loans. That is why as a byer, you want to present as low a risk as possible to lenders. This may, in turn, result in fewer loan approvals by lenders.
Save for a down payment. While this may not have anything to do with the amount you are actually qualified for when it comes to applying for a loan, it will surely make your monthly payments less. The more you are able to put down in the beginning, the less you’ll pay each month. This will make it easier to pay off bills and take care of regular bills and expenses.
Deminish your debt. This is absolutely essential. Pay off all credit card bills beginning with the lowest and making your way up to the largest balance. Work to pay more on one at a time while continuing to make minimum payments on the others. That way you can begin seeing resultsmore quickly. Once you’ve paid one off, move onto the next.
Applying for a loan may seem daunting, but it doesn’t have to be. To learn more about the new rules pertaining to the qualified residential mortgage, visit Dean Graziosi’s site.