How Much Can You Afford?
Before shopping for a new home, it is a good idea
to find out what you can realistically afford.
What will your financing costs be?
How can you
reduce mortgage insurance costs?
How much will your mortgage payments
be?
A
Mortgage Calculator helps you figure out how much house you can buy based on current
mortgage terms and your personal financial situation.
Types of Home Mortgages
There
are many kinds of home mortgages available. These home mortgages differ in
their loan terms or their rate status. The advantage of each type of home
mortgage depends upon the financial situation of the times. Some home mortgages
fare better when interest rates are low. Others rise up to the challenge of
high home mortgage rates.
Home Mortgage Rate
Mortgage
rates are always changing. This change in mortgage rates is affected by several
factors. One major factor that affects the dynamics of mortgage rates is
inflation. Inflation is characterized by a booming economy and an increase in
the prices of goods and other commodities. When the economy is strong, prices
of goods and services rise, signaling the rise of real estate prices, apartment
rents, and mortgage rates as well.
 In the USA, the process by which a
mortgage is secured by a borrower is called origination. This involves the
submission of an application and documentation related to the customer's
financial history. This information is then reviewed by an underwriter.
Sometimes, a third party is involved, such as a mortgage broker. This
entity takes the borrower's information and reviews a number of lenders,
selecting the ones that will best meet the needs of the customer.
If the
underwriter is not satisfied with what the borrower provides, additional
documentation and conditions may be imposed, called stipulations. The meeting
of such conditions can be a daunting experience for the consumer, but it is
crucial for the lending institution to ensure the information being submitted
is accurate and meets specific guidelines. This is done to give the lender a
reasonable guarantee that the borrower can and will repay the loan. If a third
party is involved in the loan, it will help the borrower to clear such
conditions.
Documents typically required for underwriter review:
- credit report
- Uniform Residential Loan Application
- Uniform Residential Appraisal Report
- Verification Of Employment (VOE)
- Verification Of Deposit (VOD)
- Single Family Comparable Rent Schedule
- Transmittal Summary Copy of deed of current
home
- Federal income tax records for last two
years
- Verification Of Mortgage (VOM) or Verification
Of Payment (VOP)
- Borrower's Authorization
- Purchase Sales Agreement
- Self-Employed Income Analysis and Comparative
Income Analysis -- used if borrower is self-employed
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Realtors