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Moving - Get Pre-qualified

Monday, January 5, 2009

by Ashton Gustafson

How much home can you really afford? The first step in buying a home is to have a budget and figure out how much you can actually afford. Your agent or lender can help you with this in a couple of ways:

Pre-qualifying process This process will give you a general "estimate" of what you will be able to afford.

Pre-approval process This process will allow your lender to review your finances in more detail in order to determine the amount of money they agree to loan you for your home purchase.

Your lender will review your finances and focus on a few main areas such as:

Gross monthly income
Credit history
Amount of outstanding debts
Source and amount of money available for down payment and closing costs
Interest rates, etc.

All these things put together will help your lender determine two important qualifying ratios.

Debt-to-Income Ratio Generally the amount of debt you pay each month should not exceed 36 percent of your gross monthly income
Housing Expense Ratio Most lenders will not approve your loan if the mortgage payment exceeds 28 to 33 percent of your gross monthly income

These are the first steps in determining how much you can afford when purchasing a new home. For more mortgage and finance information feel free to visit Texoma Home Source

Foreclosure Could Attract Con Artists - Beware of the Signs

Sunday, December 21, 2008

by Ashton Gustafson

Homeowners facing possible foreclosure are especially vulnerable to the various schemes employed by today’s con artists. Don’t fall prey to their promises. The best first step is to call your lender at once if you think you may miss your mortgage payment.

Here are some scams to watch out for:

"Sign the deed over to me, and I’ll take care of the rest. It’s all about acquiring control of your property in exchange for various promises. The "investor" may promise to make up back payments owed to your lender or to sell your home to pay back the mortgage. He or she may ask you to move out immediately, or may offer you a rental agreement so you can continue living in the home, or may even offer cash for your equity in the home.

Unfortunately, signing over your home’s deed to a third party does not clear your obligation for the mortgage. Once the deed is signed over, the unscrupulous "investor" can start making money with the property--raise your rent payments to unaffordable levels, evict you, rent the property to someone else or set up a rent-to-own agreement that nets the "investor" a tidy amount of deposit money. Meanwhile, the con artist may not make your back payments or may skip town with whatever money was made from the property. You still owe the mortgage and your lender continues the foreclosure process against you.

"Just file for bankruptcy." Filing for bankruptcy typically only postpones the foreclosure rather than stopping it. However, bankruptcy could give you time to reorganize your finances and possibly save your home. If you decide to go this route, make sure you work with a reputable bankruptcy attorney and you understand the process and the likely outcomes, including the impact on your credit.

"We’ll negotiate with your lender to stop foreclosure. Simply pay our one-time fee." You might pay $500, $1,000 or more for a bogus "service" that may not stop foreclosure or that you could have accomplished yourself--for free--with calls to your lender. There are, however, legitimate organizations out there that really can help: contact the US Department of Housing and Urban Development (HUD) at (800) 569-4287 for a list of HUD-approved counseling agencies or search online at www.HUD.gov/offices/hsg/sfh/hcc/hcs.cfm .