Before to start looking for a house

Before to look for houses, you must be Pre-Qualified!       →       →       →

· What do I need to be Pre-Qualified?

- ID, Social Security Card (Green Card or Work Authorization if you are not Citizen)

- Last Month Pay Stub

- Last Two Years Income Tax Report

- Last Two Months Bank Statement

· If I have all that information, how can I know if I qualify?

You must know your Ratios.

· What is a RATIO?

Ratio is the comparison of your Debts versus your Income. They must be equal to 31% Front Ratio and 43% Back Ratio.

Front Ratio: is equal your Home Payment divided by your Monthly Income. 

Example: John makes $3,500.00 a month and his House Payment will be $1,050.00. We divide $1,050.00 of the House Payment by $3,500.00 of his Monthly Income. His Front Ratio is equal to 30%.

Back Ratio: is equal to your Home Payment plus your debt monthly payment divided by Monthly Income.

Example: John also has a car payment for $275.00 and a Credit Card Minimum Payment of $165.00. Now John total monthly obligation payment will be $1,490.00 dollar. We divide this amount by his Monthly Income than we have 43% Back Ratio.

· How can I calculate my monthly House Payment?

You will need to know the Interest Rate, the Loan Amount, the Loan Term, the Property Tax amount, the Hazard Insurance Monthly Amount, and the Monthly Mortgage Insurance Premium (PMI) if it applies. 

· How Can I Know each piece?

The Interest Rate: It is affected by the Ratios, the FICO SCORT, and the Loan Term.

Loan Term: The Loan Term could be 30 years, 20 years or 15 years.

Property Taxes: It depend on which County your property is located. For example: for the County of Los Angeles the Property Tax is calculated as 1.25 of the purchase amounts of the property. But, you must be aware that are more taxes such as: School Taxes, Police Taxes, Fire Fighters Taxes, Sewer Taxes, City Taxes, etc. that could increase your tax ratio. You must ask to your Realtor what other Taxes must be considered to calculate your Property Taxes.

Hazard Insurance: All lenders are requesting at least Fire Insurance to protect their investment. It is calculated as .38% of the Loan Amount.

Mortgage Insurance: It an Insurance that Lenders requires if you do not are putting 20% or more as Down Payment. It has two values. The Front Insurance payment is equal to the 1.75% of the Loan amount (which can be financed) and the .85% annual renewal rate.

· How Can I Understand better all these terms or if I Qualify?

Just call and make an appointment. It will be our pleasure to help you with all your needs! Please bring all the document requested and we will help you!

Down Payment Assistant Program 

 https://www.workforce-resource.com/dpr/pmt/CRMLS/DESIDERIO_ASCENCIO