morgages???

Question

can someone answer me this: my bf and I are first time buyers. We are looking into a condo. we have about 2% saved now. We are trying to pay off pur credit cards before the loan. Is there any advice you could give me before we go apply for the loan????

Answer 1

The lending decision is really very simple. What most people forget is that the lenders want and NEED to lend money. Keep in mind how this system works - I have a lot of money, so I go see my local banker. My banker says "if you let me hold onto your money for a while, I will invest your money wisely, and when you come back for your money someday, we'll pay you more than you deposited."

The only way they can do that is to invest my money frequently and wisely. The banks have to lend money to make money, but if they're careless, and they lend money to people and businesses that won't pay them back, then they can't pay me a healthy return on my investment, and I'm taking my deposits elsewhere.

Always remember that the banks WANT to lend you money.

But here's where the catch lies - they only want to lend you money if they're confident that you'll pay them back. But think about this - they don't know you - and even if they did, you might be a nice young lady, but still not be responsible when it comes to paying back your debts. So how do they know if you'll pay them back? They look to see if you've paid people back in the past.

In order to qualify to borrow, you'll need a good credit history. That means several things - and not just that you've always paid your debts back in a timely fashion (though that's certainly the most important thing of all!). If you have little or no credit history, there's not a lot of information for the lender to go by, so you actually have to have a fairly extensive history of borrowing and paying in the past. The fact that you were super responsible about paying back the $200 balance on your Macy's credit card is not particularly indicative of whether you'll pay the monthly balance on your much larger mortgage loan. On the other hand, if you've successfully managed several cards, some student loans, and maybe a car payment or two, then there's a fairly extensive history for the lender to consider.

Also keep in mind that lenders know that you have financial obligations other than your housing expense. You need to eat, drive a car, buy gas, pay the electric bill, see the doctor, go out to the movies occasionally, and pay those other outstanding debts like your credit cards and school loans. Taking these other considerations into account, the lenders work from the assumption that no more than a certain percentage of your monthly income should be dedicated to paying your housing expenses. (numbers like 28% are common). No matter how good your credit history, banks know that your ability to pay is ultimately based on your current income - and also, of course, your likely future income. If you're a school teacher, the lender knows that you'll probably be a school teacher in 10 years, and that your salary will have increased 5 or 10 percent. If you're a waitress at Hooters, the lender is less confident in your future income stream, and worries more about your likely future ability to pay.

The best thing for you to do at this point is to sit down with a representative of your bank, or maybe a mortgage broker, and let these experts advise you on what your current financial situation would suggest as far as credit worthiness. They may be able to point out weaknesses in your current situation that you can easily resolve, and they're sure to have lots of useful advice. Some of the things that you might think are good, like paying off all your current bills, may actually be bad, so it's a good idea to get some advice to help get you heading in the right direction.

Be very cautious about special mortgage programs that will allow you to buy more than you can currently afford - that's how to get in over your head very quickly. Packages offering low initial payments are very attractive, because they can get you into a home now that you would otherwise be completely unable to afford - but keep in mind that your monthly payments will become significantly higher in the future. If you're a medical student about to graduate from med school, it's safe to be confident that your income in 3 or 5 years will be MUCH higher than it is now. If you're just getting started in a less profitable career, you really need to be honest with yourselves about the likelihood of considerably higher incomes down the road.

Good luck to you - and definitely seek out the advice of a local expert who can answer your questions based specifically on your unique financial situation.

Answer 2

If the two of you are unmarried when you buy the property, you need the advice of a lawyer to protect both of your interests. Please don't "just assume" that you can "trust" each other to do the right thing... if there is a breakup years down the road you don't want to find out that the condo is in his name only, and you get absolutely nothing.

The advice about getting cash back at closing to pay credit card bills is possibly the worst possible advice. Too many homeowners are using their home equity like an ATM and spending the cash on "stuff"... planning to take money from a real estate closing to pay bills is like borrowing against equity you haven't even built up yet. Do yourself a favor and let your home equity be a long-term "buy and hold" investment, not a pile of money you are tempted to spend... or in the case of credit-card debt, money you have *already* spent. Pay off your debts the old-fashioned way... out of current income, and live on the rest.

Answer 3

You should pay your cards down to about 40% but do not close them. You will have a better credit score if you leave them in place with less than 40% owed on each card. I would recommend that you speak with a loan officer sooner apposed to later. If there are any issues that need to be cleared up they will be able to assist you with that right away. They Will be able to assist you with the entire process =)

Answer 4

No. you may want to believe him the outcome of it first. in many cases if it turned right into a joint loan,then the homestead is bought and its a immediately 50/50 funds chop up each and each way. if that you may want to might want to get him to agree thats how he feels about it,and thats ok. in case you signal the loan over to him ,he would might want to pay you the 50% of the fee to "purchase you out",and that would make it his,yet to easily signal it over with out him understanding isn't achieveable. You didnt say why you wanted to signal it over to him(no longer merely the divorce) yet what are the excuses on your questioning this kind. So enable us understand right here . i'm hoping it makes it sparkling for you what you wanted contained in the answer you've been searching for.

Answer 5

you can take a 100% finance
and if the appraisal is more then the purchase price you might be able to get some extra $$$$$$$$ to pay off your credit card bills
if you need help let me know..

Answer 6

Put down as much money as you can. 20% down lets you avoid PMI (mortgage insurance) and the expense that comes with that. Also, check your credit scores and take any necessary action to clear up any problems that may exist with your credit.