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Introduction to Home Mortgages

Introduction to Home Mortgages. Outline. Process to purchase a home Pre-approval Programs What do Lenders look for? What should you look for?. Pre-Approval. Realtors and sellers usually require a pre-approval letter when you put an offer down on a home. Application Pull credit report

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Introduction to Home Mortgages

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  1. Introduction to Home Mortgages

  2. Outline • Process to purchase a home • Pre-approval • Programs • What do Lenders look for? • What should you look for?

  3. Pre-Approval • Realtors and sellers usually require a pre-approval letter when you put an offer down on a home. • Application • Pull credit report • Learn maximum loan amount approved for • Know payment • Good Faith Estimate (GFE) • No Cost for pre-approval

  4. Programs • 1st time Homebuyer Programs • 95% loan to value • 97% loan to value • 100% loan to value • 103% loan to value • Interest rates for 1st time Homebuyers vs rates for previous purchase homebuyers.

  5. What Do LENDERS Look For In Customers? • Credit • Credit established • 680 + credit score • Can build non traditional credit • Debt to Income Ratio • DTI between 38% and 55% • Gross income • Student loans

  6. Example Income: $60,000 a year = $5,000 a month Current monthly debt: Student loans $150 pmt Credit cards $100 pmt Car loan $250 pmt How much do I qualify for? $500 current debt per month 45% DTI = $2,250 minus current debt Approximately $1,750 a month

  7. What Should YOU Look For In A Mortgage? • Interest Rate • Fixed Rate / Variable Rate • Pre-Payment Penalty • Closing Costs • Local Representative

  8. www.wellsfargo.com/mortgage

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