buying a home

Information about home purchase loans

A Little Right and A Little Wrong

Woohoo a new post! A lot going on for me the last few weeks. Starting a new business. Had a bit of a snafu with my hosting company. If you tried to get to the site and found it was down, I apologize. I’ve switched hosts and everything is stabilized and working correctly. I’m going … Continue reading

Credit Cards and Your Credit Score

When planning to purchase a home, paying off your credit card debts is the correct thing to do. Closing the accounts is not. Leave them open with a zero balance. When you close your credit card accounts you potentially kill your chances of qualifying for a loan. The FICO scoring system takes all of the … Continue reading

Rent History

Your rental history is an extremely important factor in determining whether you can qualify for a home purchase. The best way to pay your rent is by personal check. The reason for this is that lenders will usually want to verify that you have paid your rent on time for the last 12-24 months. The … Continue reading

Past Foreclosure

When a homeowner defaults on his/her mortgage the lender forecloses on the property. Generally a foreclosure is the process prescribed by law for a lender to sell the property in order to ensure payment of the home loan. Each state has specific laws that dictate how the foreclosure is conducted but the end result is … Continue reading

Loan to Value

Loan to value is the percentage of the home’s value that you are borrowing. As a general rule of thumb purchase price is used for loan to value when purchasing and appraised value is used when refinancing. The purchase price – the down payment = the loan amount. The higher the loan to value, the … Continue reading

Employment History and Income

Your employment history and income are very important when applying for a loan. Lenders want to see that you have sufficient stable income to pay the loan back. They usually want to be able to verify your income is actually what you say it is on your application. The last two years of your employment … Continue reading

Debt to Income Ratio

Your debt to income ratio determines how much you can pay for a home. To obtain your debt to income ratio, you will first need to figure your gross monthly income. Your gross monthly income is the income you earn per month before taxes or any other deductions from your paycheck. If you are on … Continue reading

Tax Liens

There’s an old saying that there are two things in life that are certain – death and taxes. The statement is pretty true. You have to pay your taxes and you have to pay them on time. If you owe taxes and you don’t have the money to pay them you should work out a … Continue reading

Home Loans, Bank Accounts and Reserves

You have to have some money in the bank in order to get approved for a home loan. You should have enough money in the bank to cover two months’ worth of house payments – including principle, interest, taxes and insurance after your down payment and closing costs are paid. These reserves are particularly important … Continue reading

Bankruptcy Affects Home Loans

Bankruptcy is the legal process in which a person or company declares inability to pay debts. Bankruptcy laws and procedures are quite complex but for our purposes there are two types of bankruptcy. Chapter 7 bankruptcy eliminates (discharges) most of your debts in exchange for giving up property that is not protected by “exemption” laws. … Continue reading