How To Qualify For A New Home Loan!

Getting a new Home Loan is getting harder to get.As the economy recovers, home prices are heading up. Many home buyers report homes are selling quickly at higher prices. One Borrower reported while getting a mortgage in Porter Ranch the Porter Ranch Real Estate agent sold the house right out from underneath him. Here, we will give you some solid advice how to get your new mortgage quickly.

Calculate your Mortgage Payment

Before you go out and make an offer on a home, find out how much monthly mortgage payment you can afford. Mortgage lenders will look at your monthly payment as a combination of the Principal & mortgage interest on the loan and add Property Taxes, Hazard Insurance and HOA fees to it.

The total should not be much more than about 30% of your gross income monthly. This figure is referred to as your ” housing cost” monthly.

Now Calculate Your Debt to Income

What you made last month is not the income used to calculate your DTI. Mortgage lenders will use the last two years tax returns to average your income. Then, that number must be what you are making as your pay now as a minimum. It will be adjusted down if your paycheck stubs reflect it has went down, but not up. Remember, mortgage qualifying is always “worst case”.

Next, you need to add in the monthly payments on all debts reporting to your credit report. As an example, if you have a Granada Hills mortgage payment of say $2500 including taxes, you would need to add auto and credit card, revolving debt to that amount. This is your total debt per month.

Your income to your debt is called your DTI. If you want to get approved home loan done quickly, know your DTI before you go house shopping. A experienced mortgage broker will calculate it for you. The DTI should not exceed 43%. Meaning, your debt payments including housing should not exceed 43% of your average income over the last 2 tax returns.

Get Your Mortgage Qualifying Docs Ready

The mortgage lender underwriter will need the following to give you an approved new home loan:

• Last two years tax returns
• Last two years W2’s or 1099 on all Borrowers
• Two months recent bank statements- all pages
• Photo ID, like a drivers license or passport
• Copy of your social security card
• One months paycheck stubs
• A copy of your purchase agreement
• An estimate for the insurance cost
• A decent FICO credit score

Each home loan might require a few more items but the important part is get everything ready before you apply for the new mortgage. One Granada Hills mortgage application took 4 months as the Borrower dribbled in documents. Another took 5 months to get approved for a new Santa Clarita home loan.

The secret is do your DTI calculations or have an experienced mortgage professional do it for you and get your documents ready before hand. No matter if you are applying for a mortgage in San Clemente or a Granada Hills refinance, use our mortgage payment calculator to find your new payment amount. Give Mortgage Consumer.com  call with any questions you may have. If your around LA Feb 7th, be sure to join us and The Foodology Master at the LA Bacon Festaval.