Lacky Mortgage

Buying a house is both exciting and scary, especially for the first-time buyer. Most people prefer to factor in timing, in order to get the best rates. But other than being able to understand market trends, there are other things you need to look at to see if you qualify for that home mortgage.

You have a steady source of income. Examine carefully your current cash flow. Qualifying for a home mortgage means you are capable of a long-term payment commitment so you will need to consider your situation years from now. Try to foresee future expenses, plans, job movements and changes.

You have enough money saved to last you at least three to six months in case your income source is cut or interrupted. This means that you can continue to pay for your mortgage (along with other bills) and the lender has nothing to worry about.

Your debts are under control. Sure you still make monthly payments on that student loan and that credit card and you still haven’t paid up the car loan, but if your debts are consistently paid with no bad marks at least a year or two from today, then you’re looking good. That means you can be trusted.

Your monthly total debt payments (mortgage, loans, credit cards) remain below or well below 38% of your gross monthly income. This shows the lender that you are capable of paying responsibly and that a home mortgage will not drive you to bankruptcy.

If your credit history is less than perfect, it will not automatically disqualify you for a home mortgage, but a good history means paying lower interest rates and monthly mortgage payments. Before talking to a lender, check your history from one of the three credit bureaus. There might be some errors you need to correct or you might want the best arrangement that can lift your credit rating a notch higher.

You can afford to pay downpayment. You will need a sizable amount of cash to pay downpayment for your house of choice. That’s 20% of the total price. You may also choose a low or zero downpayment scheme, but it may not be cost effective in the long run. 

Decide to buy when you’re ready. A house is probably the biggest financial decision you will ever make in your life so be sure you go into it when you yourself feel that you can handle the responsibility. All that timing in order to qualify for a home mortgage really depends on you.

Allied Home Mortgage Capital Corporation (AHMCC), incorporated in 1991, is the largest private mortgage broker and lender in the U.S. The company is based in Houston and provides a wide selection of home mortgage loans. 

Allied is a mortgage broker which acts as middleman, which gives them the capability of offering several options to their clients to fit their special needs. What clients get is a customized loan package. Allied is also one of the first in the industry to operate a Spanish-language website.

If you choose to apply with Allied, some supporting documents that they might request from you are:

- Social Security Number
- Proof of employment history in the past two years, with salary
- Pay slips covering the last 30 days
- Current W-2 forms
- Bank information including check, savings accounts and certificate of deposit
- Other investment info (stocks,bonds) and a list of assets
- Insurance company info including face amount and cash value of insurance, if available 
- Liabilities with creditor’s info, monthly payments, balances
- Other sources of income
- Copy of DD Form 214 and Report of Separation for VA Loans

Allied offers assistance for a wide line of loan choices like new home purchases, refinancing, new construction, debt consolidation and customized loans, among others. These loans are available to most types of clients: first time homebuyers, the self-employed, retirees, singles and investors, including those who might have difficulty getting their loans approved.

Potential clients can apply online to utilize the Express Approval program, which allows them to get loan approval in minutes. Buyers can also compute a loan estimate by using online mortgage calculators. This will give them an idea of the price range of the house they can afford, their mortgage payments and closing costs.

While the calculators are a good indication of loan affordability, they are by no means completely accurate. That is why Allied representatives recommend that you talk to them first, to see how much you can afford to pay and how much you are qualified to loan. The advantage of getting a pre-qual is that you have the confidence to make an offer on your dream house, knowing that you have control.

Allied Home Mortgage has more than 700 offices located in 49 States and in Guam and the Virgin Islands. Should you decide to get their services, there are branches available all across the country. With more than $12 billion loans closed, Allied may just have the home mortgage loan that’s tailor-fit for you.

You’ve finally found your dream house and are ready to commit but there’s that question of home mortgage affordability. Don’t let this thought scare you away just yet. Find out if you can go ahead and buy that house at last.

1. Know how much you have and how much you owe. How much income are you receiving at present? Is there a chance that it would increase? What will be your financial situation several years from now?

How much money do you owe to creditors? How much monthly payments do you make? Can you still afford to shell out more money after the bills are paid?

You’ll need a consistent source of income that can cover your mortgage and other expenses. Try to foresee possibilities that you’ll need to factor in: a new child, changes in the job, back-to-school plans and cash-flow five or several years from now. Be prepared to be in it for the long haul.

2. If your debts are well managed, then you can afford a home mortgage. The lender will approve your loan more quickly if he sees that your debt-to-income ratio is well within manageable range.

The lender will ensure that your payments will only total 33% or less of your monthly gross income. Otherwise, pay off some of your debts before applying for a home mortgage.

3. Decide which one you prefer: fixed, adjustable or balloon rates. Paying a fixed rate is a more popular choice because it can protect you from surges in interests while paying the lowest rate possible for an agreed period of time may be lighter on your budget, but your mortgage payment can go up later.

4. Interest rates will go up and down depending on the activity of the market. If you can read and understand market trends and economic indicators, you can save a lot of money.

5. Be prepared to pay a downpayment. Typically, it is about 20% of the total price. A house priced at $200,000 will require a down of $40,000. There are also loans with low or no-downpayments, but it will cost you in terms of equity in the long run.

6. You have enough money saved that’s equivalent to at least three months’ monthly income. This will help cover unexpected expenses that could affect your mortgage payments.

There is no fixed answer on the affordability of a home mortgage. It will all depend upon your income, debt, interest rate and other factors. If the home mortgage fits into your personal situation, then you can definitely afford it.

Many people may have been enjoying mortgage rates that are lower than what you have right now, but it isn't easy to say so.

Why? Simply because getting lower mortgage rates isn't that easy. First, you have to think about the refinancing schemes that mortgage lenders will provide you in case you want to lower your rates. Lending companies wouldn't give you something good without the necessary qualification.

So the next step is for you to consider if it is high time for you to refinance your mortgage. Some people think that refinancing their mortgage will be a lot easier to do because of the financial history they have built with the company. Most of them believe that refinancing is always a good choice of getting lower rates. 

In some ways, refinancing a mortgage can be a good idea, but it still depends on the situation or on the type of mortgage that you have.

Lending companies may no longer need new research on your properties or a simple property assessment. In most cases, lending companies are also willing to give lower rates. 

All of these things are easily provided to those who wish to refinance their mortgages because lending companies believe that it is easier to maintain a paying customer than to find another one.

So the question now lies on whether it is time for you to refinance or not because not all refinancing schemes are created equal. This goes to show that every refinancing scheme may differ from the others and would entirely depend on the kind of program you wish to pursue.

For instance, would you like to have a plain refinancing scheme for your mortgage? Or would you like to have lower rates and still cash out to pay down other debt?

Before you can decide on such things, it is best that you consider first the reasons why you are refinancing your mortgage in the first place. Here are some of the common reasons consumers make whenever they decide on refinancing their mortgages:

1. To gain benefit from an enhanced credit rating 

Some people are lucky enough to get mortgages in spite of their bad credit rating. However, they may have to suffer the consequence such as having higher interest rates.

As time goes by, these consumers try to build up their credit rating by paying their dues on time. Nevertheless, having high interest rates can be very expensive to maintain. That is why they opt to refinance and desire for lower interest rates.

In this way, refinancing now could be the best time for you to save more than to continue paying higher interest rates in spite of your good credit rating. 

Besides, maintaining higher interest rates may only bring you troubles considering the fact that at any point in time, you may not be able to sustain higher interest charges.

2. Modify your loan

If you have chosen an adjustable mortgage rate in the first place, you may find it reasonable now to get a fixed-rate mortgage considering the discrepancies on the interest rates. 

Adjustable rate mortgage may appear very low at some point in time because they are primarily dependent on the different factors that affect the interest rates set by the Federal Reserve. 

But then again, adjustable rate mortgage can change a maximum of twice a year. So that goes to show that interest rates such as these can change from time to time. So to speak, you can get either a lower or a higher rate depending on the kind of adjustable rate mortgage you have.

On the other hand, fixed-rate mortgage can give you lower rates in the end because they don't change whatever happens.

So if you want to convert your loan into a fixed-rate mortgage, you have to refinance your mortgage.

3. Get a lower interest rate and cash out and pay other debts

Some consumers want to have a better deal. They want to refinance their mortgage but would also like to cash out at closing so that they can use the money to pay their other debts.

It is like hitting two birds with one stone. There are some people taking charge of their home equity whenever the prime rate is lower than the standard rate of a fixed-rate mortgage with a 30-year pay out plan.

Financial experts say that getting home equity is the better option at this point because the rates will be cheaper. However, as time passes by, cashing out and still get lower rates through refinancing schemes is still the best choice.

Refinancing your mortgage to a lower rate and still get to cash out to pay your other debts would simply mean getting more than what you presently have a loan from, and subsequently taking the change.

For instance, you have an existing loan of $50,000 on a $90,000 house. You have decided to get a lower interest rate on that loan and still get $10,000 cash to pay off your car loan. 

Through cash-out refinancing, you can easily get your heart’s desire by refinancing your mortgage from $50,000 to $60,000. In that way, you were able to lower your mortgage interest rate on your standing balance of $50,000 and still get cash as you wish.

With all these things, refinancing might just be the answers to your prayers. You see, it really pays to know the difference. Don't just take somebody’s word for it. Work on it…now!


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