The Financing Process
Getting Pre Approved
If you are serious about buying a home you need to get pre qualified or better yet pre approved. We currently work with a few local lenders and can help you get the loan you need. Through various means of creative financing the possibilities of getting a home mortgage even if you have some problems with your credit are very good.
You can typically get pre-qualified over the phone or on the Internet in a few minutes. A pre qualification is not as beneficial as a pre approval. We highly recommended that you get pre approved before you start looking for a house. This will help you: Find out the maximum house you can buy, so you know what price range of homes to look at.
This also puts you in a stronger position when you are negotiating with a seller. The seller knows that your loan is already pre-approved and if need be you can close on your new home more quickly.

How Much House Can You Afford?
A good way to determine the amount of mortgage that you will qualify for is to take your gross monthly income which is before taxes and other deductions. Then multiply it by .28. This is just over one quarter (1/4) of your gross monthly income. Mortgage companies use qualifying ratios to determine how much money they will lend you. Most mortgage companies use either a 28/36 ratio or a 25/33 ratio. The first number in each pair represents the percentage of your gross income that the lender would consider as an acceptable mortgage payment. It works like this, if your gross monthly income is $2,500. Then $2,500 x .28 equals $700 per month. The second number represents your gross monthly income and all of your incurred debt payments, not just the mortgage. If you make $2,500 per month, and also have a $225 a month car payment, $2,500 x 36% is $900, minus the $325 car payment equals $575. If you have incurred more debt, you would qualify for less. This is why it is so important to pay down credit cards, and buy the new car later.