Qualifying For Home Loans In Today’s Market

Posted by RealEstateBargains.biz

March 23, 2008

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You might be wondering what it takes to qualify for home loans in today’s market. Well, there are certain rules for qualification that you must adhere to.

For instance. Let’s say you earn $75,000 per year and your spouse works part-time, earning $25,000 per year.

You pay out $208 in property taxes monthly and $75 a month in hazard insurance.

Your car payment is $250 per month and your credit card payments are $200 per month. You want to get a mortgage for 10 years at the current rate, which is at 5%.

So you qualify for a maximum monthly mortgage payment of $2,050.24 and a maximum loan of $193,299.40.

Now. There are adjustable rate mortgages and fixed rate mortgages. Adjustable rate mortgages offer you a lower rate at the beginning of the payment cycle. Later on your interest rate will be adjusted according to the current going rate.

Adjustable rate mortgage loans are available for home purchases, as well as for home refinance. Mortgage Refinance mortgages can be used to consolidate loans or to obtain cash for equity in the home.

Fixed rate loans offer you a fixed initial rate for a pre-determined period. This is a good choice if you want to know exactly what you will be paying out on a monthly basis. No surprises here.

A home equity loan uses the equity you have built up over the years. This is calculated by taking the current value of your home and subtracting what you owe.

You can usually borrow between 80%-100% of your home’s equity and sometimes even more. This money can be used for almost any purpose.

Home equity loans have a fixed rate and the repayment schedule is usually between 10 to 15 years.

You can save a lot of money over the term of home loans by arranging for bi-weekly payment terms. Bi-weekly just means that you make payments every two weeks instead of every month.

To use our free online mortgage calculator or for more information on Home Loans, Home
Refinance or Mortgage Refinance, go to Refinance.com.