Financial Situation Assessment
Every home buyer requires a “financial situation assessment” when thinking of purchasing a home. For starters, you can use an online mortgage calculator to get a sense of your buying power and monthly mortgage payments. As a general rule, most experts say that your housing expenses should not exceed 28 percent of your gross monthly income, but a variety of factors – from your credit score to other debt – can open this ratio up to a pretty wide range. Remember that there are other costs involved in buying a home, such as moving, decorating and remodeling expenses. You should also consult with your accountant or financial adviser for a “financial situation assessment” and to talk about how a real estate transaction affects your financial goals. Knowing where you will come out of the transaction will give you a lot more confidence going in.
Getting Pre-Approved
In today’s home-buying environment a “financial situation assessment” leading to a mortgage pre-approval is not only essential; it is also incredibly easy to obtain – whether online, over the phone or in-person. A mortgage pre-approval lets you know exactly what you can afford to buy. It also demonstrates to a seller that you are a willing and able buyer. And it gives you a head start in getting an actual loan commitment. Many offers will not even be accepted if the home buyer is not pre-approved for the amount of the money that will be financed in the form of a mortgage loan from any lender or lending institution. We can perform an analysis of your financial situation like income, debt and assets to determine what amount of mortgage financing will be available to you. This is essential information to help you realize the amount of money you can spend buying a home and the price range within which your home searches must be. Sometimes, the amount of mortgage loan you qualify for can even determine the location of your new home.