Concerned you won't get a mortgage?

I have been talking to friends, and many are concerned that they would not qualify for a loan, due to the recent news of mortgage companies closing. Yes, approximately 120 mortgage companies closed, but there are many other companies still providing loan money for qualified purchasers. They are also continuing to refinance current homeowners.

The type of loan that created this problem, as I discussed a while back, is the sub-prime loan. It may be harder to qualify for a loan today, but many of the sub-prime loans had a high interest ARM. Qualifying for a loan with difficult credit only resulted in greater cost, meaning that many homeowners got into a house, but can no longer afford the mortgage payment.

If you have good credit, money in the bank, and a desire to purchase a home, you are a good candidate to apply for a 30 year fixed mortgage with a good interest rate. Last week, the interest rate ranged from 6.625% to 7.125% without having to pay points. An individual borrower's rate will depend upon loan size and creditworthiness.

Unsure of your creditworthiness? Call me, and I will be glad to provide the name of some very reputable mortgage brokers and bankers.

A mortgage that sounds to good to be true?

If your inbox is anything like mine, I get about 5 requests a day for a mortgage or to refinance my home. Also, almost every website I visit has an ad for a loan product that says I can buy a $500,000 house for about $10.00 a month.....OK, it's not $10, but it might as well say that for the chance you have of getting that kind of deal. I don't care if you have an 800 credit score (the highest available)----you'll end up paying for these incredible offers in the end.

Don't jeopardize your credit---get these offers checked out. You can contact me at audrey@audreybutlerhomes.com, or contact one of the loan officers I have listed on my website. If you don't feel comfortable contacting one of us, you can educate yourself at:

http://www.federalreserve.gov/consumers.htm. They offer pamphlets explaining all the terms, and offering sound advice on what to expect from different loan packages.

Know the risks before you sign the bottom line!

Are you ready to buy?

With all the discussions about sub-prime loans and home prices, many of the people I talk with are concerned they can't afford a home. You do need savings to be a good homeowner, for maintenance and emergencies.

But how much is too much to spend on a house?

The rule of thumb is 33%. Your monthly housing costs, including principal, interest, taxes and insurance should not be more than 33% of your gross income. With all your other loans and credit cards, your total debts should not be more than 38% of your gross income.

If you have any additional questions about affording a home, give me a call.