How Much Money Can I Borrow ? Part 2
In the previous post we discussed the question how much can I borrow for a mortgage? We also discussed what mortgage companies are looking for to help you get approved. In this post we will discuss in more detail different variables and give you some answers on how much money you can borrow for a mortgage when buying a house. We will also discuss appraisals and other factors that can help you get the mortgage you are looking for.
Credit Score and How it effects How Much you can Borrow on a Mortgage
Credit Scores and have gone down with the current mortgage crisis but the problem is mortgage companies are making the standards of getting approved for a mortgage a lot more difficult. A home buyer used to be able to get approved with a credit score of 620 and about 10% equity in the house. The score now is around 670 and with that 670 score you will probably get approved with a 20% down payment. That is a huge difference. This is part of the reason why the housing market is in the doldrums. People are losing there houses left and right and people that are trying to buy them cannot get approved. If your score is under 670 it will be hard for you to get approved at a decent interest rate. One thing that you can do to better your chances if you fall below the cutoff point is to get a co-signer who is above the 670 score. The bank is more likely to approve you with two people on the lone as long as one has a score over 670 and your score is not much less. This way if you don’t make the mortgage payments they have two people they can go after.
Appraisals and how they Effect How Much you can Borrow for a Mortgage
Before a mortgage can be approved the bank sends out their own individual appraiser to see what the real value of the house is. They appraisal normally cost you about $300.00 and the appraiser goes to the house to see what the square footage is and the condition the house is in. He than goes and pulls comps which are recent sales numbers of what houses have sold for in your area in the past year. This is not an exact science due to the fact that if a house is sold through a foreclosure the value of the houses in the area will be effected. Also if you are in a secluded neighborhood you might not have a recent sale to go by. These are all major factors when trying to figure out how much can I borrow for a mortgage.
[...] profit. trust me when I tell you that it is being done and being done daily. This housing market is prime for these type of loans. The private lender is happy and so is the person flipping the [...]