Mortgage Payment

What Drives a Lending Decision?

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Mortgage Lending
When someone is ready to buy, they often hop in their car and start browsing the local housing stock for their new home. It can be an exciting venture, especially when you’ve found a few in your price range.

But what is your “price range,” really? Do you know what that corner dream house with the covered patio and finished basement will cost you each month? The truth is, the sticker price in the homebuyers guide is just a part of the total housing cost and doesn’t take into account all the other costs and criteria that a lender will be considering when you apply for a mortgage loan.

There are distinct questions a lender has to answer before they can determine what a mortgage payment is going to look like. We’ll discuss these elements over the next couple installments, but for now… we will start at the beginning.

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Using Other People’s Money

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Explaining how mortgage money works is a great way to alleviate any stress a buyer might be feeling during the home-buying process.

Sticker shock is one of the biggest reasons why people are anxious when buying a home. However, once they know how mortgage money works, they likely realize that their buying power is stronger than they thought.

All because they’re using other people’s money.

Seller Concessions: Are They Worth It?

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The other day, one of my realtor friends called and asked if they should suggest that one of their sellers offer financial concessions to help sell the house. An interested buyer had the money for the down payment, but not enough funds to cover the costs & prepaids.

Of course, my answer wasn’t a simple “yes” or “no”…few of my answers ever are. But at the end of the day, if the seller is looking to close that sale ASAP, then Seller Concessions can be a beneficial utility.

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Payment Ratios – Funds to Close

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mortgage payments
In my last post, I discussed what drives a lending decision. I also want to take a look at payment ratios/formulas and how they impact the total monthly payment for a home. The dirt is in the details…let’s consider buying a house.

Whenever my team works with a client, maybe the most frequently asked question is, “How much will this house cost me every month?” It’s understandable….a necessary question. Buying a home is a huge financial investment. Not to mention one of the most important financial decisions a person will make. I find many clients are under informed about what home ownership truly costs.

The mortgage loan is simply one variable in the grand scheme of things. Instilling confidence by providing “how to” details is important…with financial clarity comes less anxiety.

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