Find
a Home
Pine Mountain Realty, Inc.,
as a full service real
estate agency serving
Ruidoso and surrounding
communities for almost
twenty years, it is a great
place to start. We are
members of the area multiple
listing service (MLS) and
have access to all regional
listings for you to consider
as well as properties that
may not be, for some reason,
on the system. Our very
experienced and
knowledgeable staff are
delighted to have you come
in and discuss your real
estate needs, look over what
is available and help you
make what might be the most
important purchase of your
life. We are in a position
to email or fax information
with photos in most cases if
you prefer.
Buyer's Broker
Pine Mountain Realty, Inc.,
also as a full service real
estate agency, can help you
find that special place you
have been dreaming about or
desperately need and
represent you as a real
estate Buyerıs Broker. In
this case the buyer broker
owes full fiduciary
responsibility and loyalty
to the buyer and would enter
into a formal agreement that
spells out the
responsibilities of both
parties. Some of the
benefits of using a buyer
broker in addition to having
a lot of the leg-work done
for you, the broker will
research selected properties
to identify any problems or
issues to help the consumer
in making a decision prior
to making an offer. Also,
present offers and negotiate
for the consumer and help in
securing appropriate
structural inspections and
financing.
What can you afford?
"Know what you can afford"
is the first rule of home
buying, and that depends on
how much income and how much
debt you have. In general,
lenders don't want borrowers
to spend more than 28
percent of their gross
income per month on a
mortgage payment or more
than 36 percent on debts.
Loan
Pre-qualification
Check with several lenders
before you start searching
for a home. Most will be
willing to calculate what
you can afford and
pre-qualify you for a loan.
A pre-qualification is an
informal discussion between
you and the lender and
involves a simple
calculation considering
several factors, but
primarily your income. There
are no guarantees with a
pre-qualification, but it
will be useful when you make
an offer on a home.
The price you can afford
to pay for a home will
depend on the following:
|
1.
|
Gross income
|
|
2.
|
The amount of cash
you have available
for the down payment
, closing costs and
cash reserves.
|
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3.
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Your outstanding
debts
|
|
4.
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Your credit history
|
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5.
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The type of mortgage
you select and
current interest
rates
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Principal, Interest,
Taxes and Insurance
Another number lenders use
to evaluate how much you can
afford is the housing
expense-to-income ratio. It
is determined by calculating
your projected monthly
housing expense, which
consists of the principal
and interest payment on your
new home loan, property
taxes and hazard insurance (
PITI ). If required, monthly
homeowners association dues
and/or private mortgage
insurance will be added to
your PITI. This ratio should
fall between 28 to 33
percent, although some
lenders will go higher under
certain circumstances. Your
total debt-to-income ratio
should be in the 34 to 38
percent range.
Debt-to-Income Ratio
A ratio used by some
lenders limits the mortgage
payment to 28 percent of the
borrower's gross income and
the mortgage payment,
combined with all other
debts, to 36 percent of the
total. The fact that some
loan applicants are
accustomed to spending 40
percent of their monthly
income on rent -- and still
promptly make the payment
each time -- has prompted
some lenders to broaden
their acceptable mortgage
payment amount when
considered as a percentage
of the applicant's income.
Mortgage loans requiring
little or no outside
documentation often can be
obtained with down payments
of 25 percent or more of the
purchase price.
Down Payment
Down payment is usually 20
percent of the purchase
price of the property. If
it's less, most banks
require you to buy private
mortgage insurance. PMI
typically adds several
hundred dollars to the cost
of the loan, but you won't
need PMI when you can prove
that you have at least 20
percent equity in the
property. Equity is the
value of the home minus the
outstanding loan balance.
But to remove the PMI, most
lenders require that you
obtain -- and pay for -- an
appraisal.
Paying with Gift Money
Many first-time buyers
purchase their home with a
loan or a money gift from
their parents. Lenders will
ask for a gift letter
stating that no repayment of
the gift is expected. In
addition to the letter, a
lender can ask for two or
three months' worth of
statements for the account
where the down payment funds
are located. If the money
was recently placed into
that account, the lender may
ask where it came from and
request verification of that
source as well.
Gifts -- with the proper
documentation -- can be from
relatives, friends, an
employer, church,
municipality, or nonprofit
organization. Lenders often
have stricter restrictions
on gifts from friends and
relatives other than
parents. Also, if you put
less than 20 percent down,
some lenders may require
that a portion of the down
payment be your own cash,
not a gift. If you want to
use a gift as part of your
down payment, check with
individual lenders to learn
the restrictions of specific
private or
government-insured mortgage
programs.
Closing Costs
Closing costs are the
fees for services, taxes or
special interest charges
included in the purchase of
a home, i.e., upfront loan
points, title insurance,
escrow or closing day
charges, document fees,
prepaid interest and
property taxes. Unless,
these charges are included
in the loan, they must be
paid when the home is
closed.
Studies show that the
closing costs, are often
more costly than many buyers
expect. But there are some
possible ways to save:
-
Negotiate
Negotiate with the
seller to pay all or
part of the closing
costs. The lender must
agree to this as well as
the seller.
-
Get a no-point loan
Points are fees paid to
persuade a lender to
make a mortgage loan.
Each point is equal to 1
percent of the loan
principle. The trade-off
is a higher interest
rate on the loan and
many of these loans have
prepayment penalties.
But buyers who are short
on cash and can qualify
for a higher interest
rate may find a no-point
loan will significantly
cut their closing costs.
-
Seller
financing
This kind of arrangement
usually does not entail
traditional loan fees or
charges. Shop around for
the best loan deal. Each
direct lender and each
mortgage brokerage has
their own fee structure.
Call around before
submitting your final
loan application.
