How much House can I Afford


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Are times getting tough?

Contact Your Lender As Soon As You Have
A Problem
Many people avoid calling their lenders when
they have money troubles. Most of us are
embarrassed to discuss our money problems
with others or believe that if lenders know we
are in trouble, they will rush to collection or
foreclosure.

Lenders want to help borrowers keep their
homes. Foreclosure is expensive for lenders,
mortgage insurers and investors. HUD/FHA,
as well as private mortgage insurance
companies and investors like Freddie Mac
and Fannie Mae, require lenders to work
aggressively with borrowers who are facing
money problems.

Lenders have workout options to help you
keep your home. However, these options
work best when your loan is only one or two
payments behind. The farther behind you are
on your payments, the fewer options are
available.

Do not assume that your problems will quickly
correct themselves. Don't lose valuable time
by being overly optimistic. Contact your
mortgage lender to discuss your
circumstances as soon as you realize that
you are unable to make your payments. While
there is no guarantee that any particular relief
will be given, most lenders are willing to
explore every possible option.

Hud Counseling Agencies

9 Steps to take when buying a
Home

1- Figure out how much you can afford
2- Know your rights
3- Shop for a loan
4- Learn about homebuying programs
5- Shop for a home
6- Make an offer
7- Get a home inspection
8- Shop for homeowners insurance
9- Sign papers

How to readjust an ARM Mortgage

By Yuwanda Black, published May 14, 2007

1. Call the Note Holder: In other words, call the company
you pay your mortgage to ever month. Their contact
information can be found on your monthly mortgage
statement.

Ask to speak to the Loss Mitigation Department. This is the
department that handles collections basically.

A Banking Irony: You should call before you get behind on
your payments. However, know going in that many are not
going to want to renegotiate with you unless and/or until you
are behind on your mortgage payments.

You may have to keep calling to get someone to work with
you, but at least they will have a record of your call long
before you run into trouble. The point is to stay persistent if
you know that you are not going to be able to afford your
mortgage once the rate goes up.

2. What to Expect: Once you speak with the loss mitigation
department, explain why you're not going to be able to afford
the new payment once the rate adjusts on your mortgage.
And, be ready to prove it. How?

They're not going to just take your word that you're not going
to be able to pay. They're going to ask you for proof. Eg, pay
stubs, monthly obligations, household income, etc.

Once they get all of this information, they will run a DTI (Debt
to Income Ratio), much like your loan office did when you
first applied for your mortgage. Based on their formula, they
will decide if you are a good candidate for renegotiation.

3. Provide Paperwork: If your lender decides to let you
renegotiate your ARM, they will ask you to send all
paperwork within a certain time frame - usually 7 to 10
calendar (not business) days. Do it! Otherwise, you may
blow the deal.

Once they have all of this, they will send you some
paperwork to sign with the new loan terms spelled out.
Whether it's a refinance, a delayed rate adjustment or a new
payment schedule - read over the documentation carefully
to ensure it's what was agreed to over the phone.

There is only 1 formula to
determine how much House
you can Afford. It has never
changed and is as consistant
as the day is long. Your
Mortgage Payment should not
Exceed 25 percent of your
total income per Month.