Many homeowners first look for a house, then seek out a good mortgage plan. For most people, one of the most stress filled times of their lives is securing financing for their home. The truth is, shopping for a mortgage does not have to be stressful.
Most mortgage brokers offer free pre-qualification for home buyers. Before you select your home, we suggest you select your mortgage brokerage and the loan program. Your loan officer will work with you to find the program best suited to your needs. Based upon the pre-qualification, you will be able to determine how much you can afford to spend on a home. If your cash on hand is limited, a loan officer can also show you how a seller might help you qualify for the house. This is especially important to first time home buyers.
Vancouver Mortgage also offers a 24 hour Pre-Approval Program. If you are ready to select a loan program, we can submit your loan to a lender and have a firm loan commitment (subject to various conditions) within 24 hours. This loan commitment effectively turns you into a cash buyer, a very important negotiating tool to use on the seller. Many realtors request this prior to presenting an offer for you.
Please bring the following original documents:
Your most recent pay stub
The W2 forms for the last two years. (Full Federal Tax Returns if self-employed or on commission income.)
The following information will be required to complete the loan application:
All documentable sources of income.
Employment information for the past two years.
Address information for the past two years.
Names, addresses, account numbers, and current balance of all bank and investment accounts.
Names, addresses, account numbers and current balance of all current creditors.
Schedules of other major assets and all other real estate owned.
Depending on the loan program selected, varying amounts of backup documentation, such as bank statements and tax returns, will have to be supplied. For conforming loans, FannieMae requires substantial documentation. Please remember, its nothing personal; everyone must provide this level of detail. Your loan officer will provide a list of all necessary items to you.
To determine whether you qualify for a specific loan, first determine the monthly loan payment. Your Realtor or loan officer will calculate this payments for you based on the loan amount.
To estimate this yourself, use the Mortgage Calculator This provides the Principal and Interest
part of the payment.
To figure the estimated annual property
Tax, multiply the property value by 1.5%. Divide this number by 12
for the monthly tax payment. For example, a property with a $100,000
value, the annual tax payment is $1,500, or $125 per month.
To
figure the estimated homeowner's Insurance payment, multiply the
property value by 0.25%. Divide this number by 12 for the monthly
insurance payment. For example, a property with a $100,000 value, the
annual insurance payment is $250, or $20.83 per month.
Next total your monthly housing expense. This includes the loan payment, mortgage insurance, homeowner's insurance, taxes, condo fees and special assessments. It does not include utilities. Divide this figure by your pre-tax income. This ratio should not exceed 26% to 33%, depending on the loan program. Most conforming loan programs have a maximum ratio of 28%.
A second criteria is the ratio of all your debt to your gross income. To calculate this ratio, add all monthly debt payments to the housing payment calculated above. Then divide this amount by the pre-tax income. This ratio should not exceed 36% to 41% for conforming loans. Non-Conforming loan programs at higher interest rates will allow this ratio to exceed 50%.