Q&A from the corner office: The new mortgage checklist

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At NE Moves Mortgage L.L.C., Senior Vice President of Sales Phil Tocci shared an insider”™s look at what homebuyers need to know in the current market.

 

Q: What advice do you have for potential homebuyers in terms of obtaining mortgages in 2009?

Tocci: “In today’s home-buying market, knowing what you can afford is critical. Becoming pre-approved by a licensed lender is essential. A pre-approval letter states that based on a review of  documents supplied to the lender: bank statements, pay stubs, W-2 forms for two years or two years of federal tax returns, they are able to borrow a specific amount on a given mortgage product and rate.”

 

“If a lender is not willing to indicate these items in a letter, seek another lender who will.

Knowing that a lender will finance you with a certain loan amount at a given rate on a specific program are essential terms to have in a pre-approval letter. Pre-approval letters are typically subject to rate movements and have an expiration date. A credit report is valid for a period of 120 days.”

 

“Most lenders look for 12-24 months of timely payment history along with a corresponding credit score ”¦ In today”™s market, a down payment is almost always going to be required. Having savings accumulate over time (2-3 months) is a key strength ”¦ most lenders will want to see that no more than 28-33 percent of one’s monthly income is going to go toward the monthly mortgage bill ”¦ All lenders in today’s market will require a valuation of the subject property. Ensuring that the value of the house is proportionate to the loan request is necessary in the eyes of the lender.”

 

“Monthly payments on loans, credit cards, 401K loans and alimony are all calculated by the lender in a total debt ratio. This ratio typically requires no more than 38-45 percent of a monthly income go towards the total debt.”

 

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NE Moves Mortgage offices are located inside Coldwell Banker Residential Brokerage offices throughout Fairfield County and New England. For information, visit www.NEMMortgage.com or contact Phil.Tocci@NEMoves.com.