What Can I Afford?

This seems to be the very first question that is asked of me when a Buyer calls.    

This is also where I refer them to my mortgage partner Melanie Ahrens for prequalification.  

There are all sorts of things that go into getting pre-qualified.  Credit Score is key.    

A loan officer will give you a list of items needed that will expedite the process for an accurate pre-qualification / pre-approval.    Note these two are different.  But for getting the process started this is what you will need.  

Social Security Numbers of all Applicants.  

INCOME

 Name & address of employers for the past two years.  

Position & length of time as employee.  

Gross income with year-to-date paycheck stubs & copies of your past two years W-2 income tax forms.  

If self-employed, bring copies of your income tax returns for the last two years; two years’ profit & loss statements.  A year-to-date profit & loss statement my be required.  

OBLIGATIONS

Name, address of lender, account number, original loan amount, balance on loan today, if you presently own any real estate.  Provide same information for real estate previously owned & Paid off within the last year.  

List of all debts including auto, furniture, education loans & charges such as department stores, bank credit cards, etc.  List balance owing, monthly payments & account numbers — with address of lending institution.  

ASSETS

Bank names & addresses for each saving & checking account including account numbers & balances in each account.  

A list of stocks, bonds &/or certificates of deposit, etc., including their cash value on today’s market.  Include copies of statements.  

Face amount & cash value of all life insurance.  Amount of straight line coverage & monthly premium payment on principal mortgagor.  Amount of life insurance provided by employer.  

Real estat’es presently owned  approximate market value.  

MISCELLANEOUS

 If renting, will need lease agreements & amount of rent payments.  

Copy of divorce decree & separation agreement, if you have been divorced.  

Discharge (Form DD-214) & Certificate of eligibility, if applying for a VA-guaranteed loan.  A statement of service & off-base authority, if VA & still on active duty.  

Verification of social security benefits, VA benefits or child support.  

Checkbook-application fee will be collected at application.  

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The Chart below illustrates estimated loan amounts that correspond to sample monthly payments under various interest rate scenarios.  Financing examples below are for illustrative purposes only and are not commitments to lend.  Rates, terms and conditions are subject to change without notice.     

What size mortgage can you comfortably afford?

  Click on Chart to see larger view. 

 Monthly payments are principal and interest only and do not include taxes, insurance or any other fees that my apply, which will result in a higher actual payment. 

  Examples here are shown and assume 3% closing costs and 20% down payment.  Based on a 30 year fixed interest rate loan program also.   Your payment may be different than above, depends upon loan balance, current guidelines and othere factors.   

Always best to talk with the lending professional.