In Colorado, potential home buyers explore financing options to determine what properties are available to them. The financing options are based on their current credit score, income, and their current volume of debt. A mortgage broker can present the buyers with clear options based on a more thorough assessment of their current financial status.
Reviewing Income to Debt Ratio
The buyer’s income to debt ratio defines their ability to acquire a loan. It determines what percentage of their income is tied up in debt. If the ratio is considerably high, it is less likely that they will acquire a mortgage loan. The most favorable income to debt ratio is 43%. This indicates that less than half of their income is required for their debts.
Identifying the Highest Mortgage Value Available
The broker reviews all possible mortgage value available to the buyer. With this assessment, they identify the highest value available based on affordability. They must add the mortgage value to the buyer’s existing monthly expenses. This value is deducted from their total monthly income to determine if the buyer can pay the payments without difficulty.
Reviewing a More Realistic Budget
After the broker identifies the highest mortgage value they help the buyer arrive at a more realistic budget. The broker evaluates possible life events that could affect the buyer’s ability to pay. Job loss and divorce are common considerations when setting up a budget. The budget must reflect a value in which the buyer could pay if a sudden life event altered their income or earning potential.
Evaluating Properties According to Loan Product Requirements
Select mortgage loan products require properties to pass rigorous inspections. Typically, as long as the property doesn’t have major problems, they will pass for an FHA and a conventional mortgage. However, the requirements for a VA loan are stricter. A broker can help buyers review financing requirements.
In Colorado, potential home buyers review financing opportunities with local brokers. The brokers present the buyers with mortgage loan products based on their current credit scores and earning capacity. Buyers who want to review mortgage opportunities more thoroughly contact a mortgage broker through Midwest Mortgage Associates Corporation today. You can also connect them on Facebook.
