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Unless you can pay cash, you're going to need a loan to buy your home.
How Do Lenders Figure What I Can Afford?
When reviewing the loan from the income side, the banker works with "debt
ratios". These debt ratios are simply a safe percentage of your income that
may be used to pay debt. Debt is considered to be bills such as car
payments, credit cards, student loans, installment loans, etc. that you
still have to pay on for more than 10 months. This does not include utility
bills, groceries, car insurance, etc. The lender is simply making sure that
by loaning you money you have an ability to pay it back and live
comfortably.
These debt ratios are calculated as follows:
Family Monthly Income
R.O. 1000
Total Debt Ratio (60%)
* .6
Total Monthly Debt
R.O. 600
The Family is capable of spending R.O. 600 per month on all their debt.
Family Monthly Debt R.O. 600
Bank Loans 110
Car Loan 95
Money Available Loan Installment to Purchase house R.O. 395
The lender would say that there is R.O. 95 available to cover the principle,
interest and insurance on this home. We would calculate that at 8.8%
interest, or the current rate, for 30 years, this family could borrow R.O.
50,000 to build their home. Please remember, interest rates do change so we
would have to quote you a rate when you apply for the loan.
How Do Banks Work?
People that are building new homes typically find that the most confusing
process of obtaining their home is the financing. They have heard their
friends talk about their experiences in obtaining loans. The big question
is, "But can I get a loan?"
Every lending institution is set up to appeal to a different type of
customer. Some loan money to people with large down payments and excellent
credit. Others lend money to people with less of a down payment with injured
credit. Basically, it all boils down to how much risk the particular lender
wants to take.
When a lender analyzes risk, they can make two adjustments to the loan to
counteract the risk. They can adjust the interest rate and/or equity
position. A larger equity position better covers their risk because of the
customer commitment to the home.
What Do Banks Look At When They Give a Loan?
When a lender "pre qualifies" a family they look at two situations. First is
the credit side. Second is the income side.
When a loan is reviewed from the credit side the lender is basically looking
at how much credit a customer has had, as well as how a customer has paid
their previous bills. They cannot predict the future so the best way to
determine how a customer may pay their bills is to look at the past.
How Do I Find Out What I Can Afford?
Mustaqbal pre qualifies customers at no cost. All you need to do is
fill out one of our pre qualification authorization forms and fax or mail it
to us. Even though you may have calculated the number yourself, we suggest
that you have our lenders review your situation.
Can You Get Us Mortgage?
There are two loans involved when building a home. First Loan is for the
land you purchase when you decided to buy the house. Second is the
construction loan which pays money out while the home is being built
We can arrange...
1. 100% Land and Home Financing as one package
2. Free Pre qualification
3. No Payments during construction.
Mustaqbal's Landmark's lenders are very experienced and highly trained to
work with families in different financial can credit situations. Our
financing may be the difference between you being able to build a home or
not get a home. Loans are being approved daily to help Owners/Builders
achieve their goals. |
