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Mortgage Calculator | Here is the Beef

Here is the beef

Are you tired of jumping through hoops just to find out if you qualify for a mortgage? Do you feel like lenders are playing a game of “Where’s the Beef” with your personal information? Well, fear not, because Mortgage Number is here to save the day!

We did some digging and found that many mortgage lenders require a laundry list of personal information before even giving you a straight answer. And even then, they may not tell you the whole story. Some lenders like to play games with your down payment and closing costs, leaving you with less money than expected and potentially costing you extra with private mortgage insurance (PMI).

You’re In You’re Out

But fear not, because Mortgage Number has got your back! With a sleek and user-friendly interface, It’s like living in a 3.0 world when online help is the 1.0 era, Mortgage Number provides an immediate answer to your mortgage qualification status. And the best part? You don’t have to give up any personal information to use it. That’s right, no more pesky phone calls or spam emails! You’re in and out. Mortgage Number created a Number and color dimension to show you where you stand in terms of qualification. Green means you’re good to go, Gray means you’re close, and Red means you need work. The higher you Mortgage Number the stronger you are from the lender’s perspective. A Mortgage Number of 1000 Green, you’re considered overqualified and ready to rock and roll!
Christopher Lagerson
1000 Green is where it’s at!

No games

So if you’re tired of playing games with lenders and want a straightforward answer to your mortgage qualification status, give Mortgage Number a try. Your wallet and significant other will thank you for it!
Mortgage Number Blog
OUCH!

No sharking

Many of these lenders asked for personal information only after the applicant had already answered a series of questions, which can be frustrating for borrowers. At Mortgage Number you get the Beef, in fact – ‘For that you get the head, the tail, the whole damn thing – Capt. Quint Jaws 1975. At Mortgage Number, we don’t loan shark around with your personal information. We give you the beef without the bite!” See for yourself!   Get your mortgage number today, it’s easy!
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Loan Calculator | 4 Mortgage Myths and Truths

4 Mortgage Myths and Truths

4 Mortgage Myths And Truths

When it comes to buying a home, it can be just as exciting as scary! Especially since we’ve all heard rumors and stories about what you should and shouldn’t do when buying a home. However, don’t let these myths intimidate you because many of them are completely false! This blog will go over 4 mortgage myths and truths so that you can make informed decisions that are not made under the assumptions of erroneous myths.

Myth #1: You Need 20% Down to Purchase a Home

Many people mistakenly believe that you cannot buy a home if you don’t have at least 20% down. This is not true. As a matter of fact, if you take out a conventional loan, you can buy a home with as little as 3% down. There are even some government-backed loans that have 0% down payment requirements.

So where does the percentage 20% come from? The 20% myth comes from mortgage lenders’ private mortgage insurance requirement. PMI serves to protect your lender if you default on your mortgage loan. For example, let’s say Bruce has less than 20% down. His lender will require that he pay PMI. PMI gives Bruce no benefits or protections as the buyer and can add a hefty sum to his monthly payment.

The PMI requirement is the reason why many financial experts recommend that people wait to buy their homes until they have 20% down. Other types of loans (like USDA loans and VA loans) don’t require PMI but may require you to pay a different kind of insurance or funding fee.

Myth #2: Prequalification is the Same as Pre-Approval

Prequalification is not the same as pre approval. The major difference between these two is the level of verification your lender conducts before issuing you an estimate. When you get a prequalification, your lender only collects basic financial information. The majority of lenders rely only on self-reported financial data when issuing prequalifications.

When you get preapproved for a mortgage loan, this indicates that your lender has verified at least some of your financial information. Lenders usually do this by asking you to submit a bank statement, or by viewing your credit report. Pre-approval is a lot more accurate than a prequalification.

Remember that even if you are preapproved, you aren’t guaranteed to close a loan. After you’ve found a home and made an offer, you will still need an appraisal before you can secure your loan.

Myth #3: You Must Have Perfect Credit to Qualify for a Mortgage

Yes, credit does play a major role in your ability to get a home loan. However, this does not mean that you cannot buy a home if you don’t have a perfect credit score. There are various mortgage solutions for those who have lower credit scores.

If you have a low credit score and you’re buying your first home, you can consider using an FHA loan. This is a government-backed loan with insurance from the Federal Housing Administration. This insurance allows lenders to issue FHA loans with lower credit requirements than a conventional loan.

Myth #4: I Can’t Afford a Home

If you can afford to pay your monthly rent, chances are you can afford a monthly mortgage payment as well. Of course, it’ll require more sacrifices, but it can be done. A tool that can help you find out if you’re ready to buy a home is our Mortgage Number Calculator. Your Mortgage Number illustrates your overall strengths and weaknesses in today’s mortgage environment. By inputting your financial information, you’ll get a number that provides insights on whether you’re financially able to take on a commitment of a mortgage or not. It’ll let you know if you’re prepared to buy a home or if you need to step back and save a bit more money in the meantime.

Buying a home is a life-changing decision. That’s why it’s important that you get informed and use all the tools at your disposal to make the best decision. We hope this blog helped clear up mortgage myths that had you in doubt. To see if you’re prepared to buy a home, use our Mortgage Number calculator by clicking here!

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What is a Mortgage Number Calculator?

What is a Mortgage Number Calculator?

What is a Mortgage Number Calculator

Advance your Mortgage Number. Have you ever felt alone in your home buying journey? Are you unsure if you’re even ready to commit yourself to a mortgage payment? There aren’t many resources out there that can give you guidance. Mortgage Number does without asking for money in return. Luckily, there’s a FREE tool at your disposal! Mortgage Number gives insights on your overall strengths and weaknesses in today’s mortgage environment. This formidable tool is the mortgage number calculator from Mortgage Number. This blog will go over what a mortgage number calculator is and how a mortgage number can help guide you in your home buying journey. 

What is a Mortgage Number Calculator? 

A mortgage number calculator is a free online calculator that allows you to quantify your level of “readiness” to buy a home. It provides the opportunity to explore what is most beneficial to you when it comes to qualifying for a mortgage. To receive your mortgage number, all you have to do is fill out the mortgage number calculator with the details of your financial situation. Once you click the Results button, you get your mortgage number! It’s that simple! 

You will get a number within the range of 375 – 1000, which will come with a color that represents where you’re at financially. With GREEN you qualify. The higher your mortgage number, the stronger you are from the lender’s perspective. A mortgage number of 1000 with no red indicates that you’re ‘over qualified’. This can be rewarded with better rates and terms. With GRAY, you’re close, and with RED your financial situation needs a little bit of work.

Why Do I Need This? 

The lending system was not made to benefit the borrower. It includes a complicated qualification process filled with intricate jargon and complex processes. The mortgage number calculator helps you save the time necessary to scale your goals with a clear understanding of opportunities available in the mortgage space. This is just what you need to gain the confidence to take the next steps with a clear understanding of how you fit in today’s lending system. 

If you get a high mortgage number, you’ll have the confidence to take the first step in buying your home since you know you’re ready. If you get a low mortgage number, it’ll stop you from getting into something you’re not financially prepared for. You’ll know that it might be a better tactic to wait and save money. We provide a dynamic  and you’ll know you’re ready! The objective with the mortgage number calculator is to bring transparency and understanding of mortgage pre-qualification. So a potential buyer is confident to move forward with whatever the next step may be.

What is a Mortgage Number Calculator Chart

How Does A Credit Score fit into this? 

Mortgage number is not a credit score. Rather than a number indicating your creditworthiness as an individual, a mortgage number offers insights on how attractive you look as a borrower from a financial institution’s perspective. Knowing your strengths and weaknesses can be to your advantage when looking for a broker or lender. Understanding how the financial world views you as a borrower will save you both time and money.

If you’re thinking about buying a house, the first thing you should do is use the mortgage number calculator to find out what your mortgage number is. Mortgage Number allows users to tap into the power of both lending continuums and know where they fit in today’s lending environment. The best part is that this amazing tool is free and available to everyone! To get your mortgage number, click here! 

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How Financial Advisors Can Use MortgageNumber.com to Benefit Their Clients

How Financial Advisors Can Use MortgageNumber.com to Benefit Their Clients

Financial Advisor with clients who want to buy a home

If you’re a financial advisor, you know how important it is to help your clients plan for the future and make smart financial decisions—especially if they’re thinking about buying a home. However, with people having such diverse financial backgrounds, it can be difficult to track and provide the best tips. Fortunately, there’s a tool that makes it easy: the mortgage number calculator from mortgagenumber.com. It’s a tool that provides users with insights on their overall strengths and weaknesses in today’s mortgage environment. Below, we’ll go over how financial advisors can use mortgagenumber.com to benefit their clients!

 

What is a Mortgage Number?

 

A mortgage number is a determiner that offers insights on how financial institutions view users as a borrower. To get your result, you simply have to input your financial information to our mortgage number calculator to find out your status. It shows you a number along with a color. With green you qualify, gray you’re on the border, and red needs work. The higher your mortgage number, the stronger candidate you are from the lender’s perspective.

 

Mortgage Number (How Financial Advisors Can Use MortgageNumber.com to Benefit Their Clients)

 

How Financial Advisors Can Use mortgagenumber.com to Benefit Their Client

 

Financial advisors would absolutely benefit from this tool as they can provide a quick and accurate status of their client’s position. By simply imputing their financial information, you can instantly provide them with valuable information about their eligibility. The best part is that this tool is completely free! No personal or credit card information ever! It’s simply here to make the complicated home buying processes a little easier.

 

Saves Time & Money

 

Knowing ahead of time what potential homebuyers can and cannot qualify for will save everyone time and money. The universal lending system was not designed for the borrower. It includes a complicated qualification process filled with intricate jargon and complex processes. Mortgage Number helps people save the time necessary to scale their goals with a clear understanding of the opportunities available in the mortgage space. With this tool, financial advisors can confidently provide their clients with insights. This enables financial advisors to create better financial plans and get their client’s goals accomplished with more accuracy and in a shorter amount of time.

 

 

Provides Value

 

If a financial advisor can provide their clients with some added value that people cannot find anywhere else, they’ll be more likely to succeed! Our site is intended for planning and educational purposes and relies on your input and assumptions. So if you use this tool wisely, you can prepare your clients to either take the next steps towards buying a home or create a plan that will prepare them to do so. When the time comes to connect with a lender, you’ll be sure that your client is ready!

 

Provides Valuable Information

 

Today there are two underwriting standards that you can qualify with. One, the Qualified Mortgage (QM) that utilizes the traditional underwriting standard. The second, NON-Qualified Mortgage (NON-QM), which offers more possibilities for you to qualify. NON-QM underwriting does not follow the traditional standard. Mortgage Number utilizes both. This convergence provides the best of both worlds when it comes to qualifying for a mortgage. This collective greatly enhances people’s qualifying reach, allowing them to do more when it comes to qualifying. Mortgage Number allows users to tap into the power of both lending continuums and know where they fit in today’s lending environment. This is a perfect tool for financial advisors to use with their clients.

 

As a financial advisor, ensuring that your clients are following the right path toward their goals is essential, and if you have a tool that will make the process more easy, efficient, and accurate, why not use it? Mortgage Number is free and available to everyone! We hope this blog helps you see how financial advisors can use mortgagenumber.com to benefit their clients! To use this valuable tool, click here.

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First-Time Home Buyers?

5 Tips for First-Time Home Buyers

5 Tips for First-Time Home Buyers

Buying your first home is a big step in your life. Whether your reason is to build generational wealth or create an investment to sell when you retire, it’s a great decision. However, there are a few steps you need to take before you can kick back and enjoy your new home. This blog will go over five tips for first-time buyers to help prepare you for the journey that lies ahead.

 

1. Be Sure You’re Ready to Commit to A Loan

 

The most important tip first-time homebuyers can get is to be sure that they’re ready! Buying a home is a big decision, so you have to be fully dedicated to it! The average mortgage loan term is 15 – 30 years. While it doesn’t always mean having to stay in your home for that long, it’s still a significant commitment. Don’t be 50% sure or 70% sure—be 100% sure that you’re ready for homeownership before you take on a mortgage! A few questions you can ask yourself before making a decision include:

 

  • • Am I ready to commit to this home and city for at least five years?
  • • Do I have emergency funds that can cover at least three months of expenses?
  • • Do I have a stable income?

 

If you answered no to any of these questions, you might want to hold off the plans for now. Keep on saving and doing research until you feel that you’re ready!

 

2. Check Your Mortgage Number

 

Now that you know that you’re mentally prepared for a home, you can get things going. However, it’s a smart idea to get insights on how financial institutions view you as a borrower first. Knowing your strengths and weaknesses can be to your advantage when looking for a broker or lender. Knowing how the financial world views you as a borrower can save you time and money! All you have to do is input your financial information into our Mortgage Number Calculator, and that’s it! You will receive a mortgage number specific to you. With green, you qualify. The higher your mortgage number, the stronger you are from the lender’s perspective. With gray, you’re close, and with red, your financial situation needs a little bit of work. If you look like you’re in good shape, you can continue with the home buying process with confidence!

 

3. Maintain Your Credit

 

The next step is to get a mortgage pre-approval! Now is not a good time to open a new line of credit. When you apply for mortgage pre-approval, lenders will pull out your credit report. They’ll do it again before you close on the house. If they find that you’ve taken on another loan or line of credit, it could risk your final approval.

 

Be sure to keep paying your bills on time. We recommend not attempting to influence your credit rating for better or worse with any risky spending. Lenders want to see that your spending habits are consistent and can be relied on for future payments

 

Man paying his bills nd maintaning his credit score

 

4. Understand Your Loan Options

 

Did you know that there are several types of mortgage loans? The type you select will determine the type of house you can buy, your down payment, and more! The most common types of loans include:

 

  • • Conventional Loans – This is the most common type of home loan. You can buy a house with as little as 3% down.
  • • FHA Loans – This loan allows people to buy a home with less strict financial and credit score requirements. People can get this loan with a 3.5% down payment with a credit score as low as 580.
  • • USDA Loans – These loans are for people who want to buy a home in a qualified rural or suburban area. People can get a USDA loan with 0% down. Subject to household income restrictions.
  • • VA Loans – VA loans are exclusively for veterans and members of the national guard and armed forces. These people can get a home with 0% down.

 

5. Don’t Forget Closing Costs

 

Don’t assume that your down payment is the only thing you need to save up for to close your mortgage loan. You will need to cover closing costs before you take control of your new home.

 

Closing costs are expenses that go to your lender for arranging certain loan services. Common closing costs you might see include:

 

  • • Escrow fees
  • • Attorney fees
  • • Pest inspection fees
  • • Appraisal fees
  • • Title insurance fees
  • • Discount points

 

You can see your exact closing costs on a document called the closing disclosure. You can generally expect to pay around 2% – 5% of your total loan costs.

 

Buying your first home can be overwhelming. That’s why you should go through the process with confidence with the help of Mortgage Number! With Mortgage Number, you can be confident that you’re well equipped by taking the next steps with a clear understanding of how you fit into today’s lending environment. It’s free and at your disposal! We hope these 5 tips for first-time buyers help prepare you for your home-buying journey! Again, if you want to understand your overall strength as a borrower, Mortgage Number is the first-ever platform of its kind that simplifies mortgage qualifications! Click here to check our calculator out!

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How To Get Approved for a Home Mortgage Loan

How To Get Approved for a Home Mortgage Loan

How To Get Approved for a Home Mortgage Loan

Are you looking to apply for a mortgage loan?

 If so, it’s important to note that the process isn’t always similar to renting an apartment or getting a car loan. To avoid the disappointment of not getting approved for a loan after finding your dream house, we have compiled some bulletproof tips to help you get approved for a home mortgage loan. By gaining the knowledge and preparation needed, you can confidently enter the home buying process.

Start Building Your Savings

Getting pre-approved for a mortgage helps determine your price range and bidding limits. You’ll need to submit financial info such as W-2s, bank statements, and retirement accounts. Lenders may approve you for more than you can afford, so factor in all recurring costs. Don’t let a higher loan approval tempt you into buying a property you can’t afford. Stick to your budget to avoid a financial crisis. These tips on getting approved for a mortgage loan will help you navigate the process with confidence!

Reduce Your Debt as Much as Possible

When applying for a mortgage loan, it’s crucial to keep your debt-to-income ratio as low as possible, as lenders consider it one of the most important factors. To ensure your application doesn’t get denied, your monthly debts shouldn’t exceed 36% of your total monthly income. We recommend lowering your debt and paying off as much of your credit card balance as possible. This increases your chances of getting approved for a mortgage loan. Additionally, it’s crucial to avoid taking on new debt between loan approval and closing the sale. As lenders recheck your credit before closing. Remember that you don’t need to be completely debt-free, but reducing your debt will improve your chances of getting approved.

Monitor Your Credit Score

When applying for a mortgage loan, it’s important to keep an eye on your credit score, even as you work on reducing your debts. Homeowners often assume they have high credit scores, only to find out they don’t when they submit their application. To avoid this situation, we recommend checking your credit score and history before beginning the application process. Having a low credit score, missed payments, or derogatory credit information can lead to your application being rejected, so it’s crucial not to ignore these factors. Keep in mind that most institutions require a minimum credit score of 680, and they can deny your request if you fall below this threshold. By monitoring your credit score and working to improve it, you can increase your chances of getting approved for a mortgage loan.

Try Out Mortgage Number

Use our Mortgage Number Calculator to prepare for a mortgage loan. It’s a free and straightforward tool that shows you how lenders view you as a borrower. Enter basic information, and the calculator provides a number system and color dimension to illustrate your strengths and weaknesses. Green means you qualify, gray is close, and red needs work. Our calculator shows you what to work on to improve your chances of getting approved. Know this before pre-approval, purchasing, or refinancing. Once you know your strengths and weaknesses, you can get pre-approved with confidence.

Get Pre-Approved for a Mortgage Loan

Getting pre-approved for a mortgage is an excellent way to determine your price range and bidding limits. During the pre-approval process, you’ll need to submit various financial information, such as W-2s, bank statements, and retirement accounts. Keep in mind that lenders may pre-approve you for more than you can afford, so it’s essential to factor in all recurring costs like groceries, gas, entertainment, and more. Don’t let a higher loan approval tempt you into buying a property that you can’t afford in the long run. Sticking to your budget is critical to avoiding a financial crisis later on. We hope that our tips on how to get approved for a mortgage loan will help you navigate the application process with confidence! Get your mortgage number, it’s easy!


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The 9 Steps to Buying a Home | Mortgage Number

The 9 Steps to Buying a Home

The 9 Steps to Buying a Home

If you’ve decided it’s time to purchase your first home, we bet you have hundreds of questions! It’s one of the most significant milestones in life and will likely be the biggest purchase you make. To help break this enormous task into manageable pieces, we’ll go over the 9 steps to buying a home. As you may have guessed, the first step starts with research!

Step 1: Research, Research, Research

Search through real estate listings, magazines, and websites (like Zillow) to do some preliminary research. Look around at homes in your area, get an idea of pricing, and see how long they stay on the market. You can keep an eye on listings to see if they change their asking prices over time. After a while, you’ll get a good sense of housing trends and know what to look out for. 

Step 2: Use Our Mortgage Number Calculator

Before getting preapproved, purchasing, or refinancing, you’ll want to visit our website and fill out our Mortgage Number Calculator. This incredibly valuable tool will show you what your strengths and weaknesses in the mortgage environment are, and will help you understand how financial institutions view you as a lender. Our free Mortgage Number Calculator allows you to skip the complex processes and time spent getting multiple quotes and gives you an immediate and clear understanding of the opportunities that are available for you in the mortgage space! Our calculator will show you the likelihood of getting approved for a loan, and how to improve potential weaknesses. Once everything looks good, and our calculator gives you the green light, it’s time to move on to the next step!

Step 3: How Much House Can You Afford?

An important step in the home buying process is determining how much house you can afford. This is calculated by looking at your monthly debts, household income, and available savings. This process will help you determine if you need to pay off some debts or save up more because lenders tend to give out the lowest rates to those with low debt, substantial down payments, and high credit scores. In general, lenders don’t recommend looking for houses that cost more than 3-5 times your annual household income. This rule of thumb applies to buyers that make a down payment of 20% and have a moderate amount of other debts. 

Step 4: Get Prequalified for Credit

Once you know how much house you can afford, it’s time to look at how much you can spend. To get prequalified for credit, you’ll need to provide your mortgage banker with some financial information such as your income, savings, investments, and so on. After they review your information and tell you how much they can lend you, you’ll have an idea of your home price range target. Then you can get preapproved for credit, where you’ll need to provide documentation such as W-2s, bank account statements, and more. Remember, use the information you received in step 2 to increase your chances of getting preapproved!

Step 5: Start Looking for Homes

Once you know your price range, you can work with a real estate agent and begin searching for homes! Since you’re likely going to be touring a lot of houses, you’ll want to take photos or videos and make some notes on your phone or a piece of paper. Remember to not only look at the house but make a note of the neighborhood and surrounding area. How are the schools? Are there grocery stores nearby? How far is the commute from your job?

Step 6: Make an Offer

When you’ve finally found the home of your dreams, your real estate agent will help you with your offer. Real estate agents have extensive knowledge of the industry and great negotiating skills that will help you reach a fair price for the home. Once you agree on a price with the seller, the house goes into escrow while you complete the home buying process. 

Step 7: Get a Home Inspection

You’ll want to have the home inspected a couple of days after the seller’s accepted the terms. The offer will be contingent on the home inspector checking for any damage or problems with the home that weren’t originally disclosed. Depending on the results, you’ll either move on to the next steps or have the chance to renegotiate or withdraw your offer. You can also ask the seller to fix any damages that come up in the report before closing the sale.

Step 8: Choose a Mortgage Loan

Shop around and find a loan that works best for you. Everyone has different priorities, resulting in lenders offering many different loan programs. Whether you want to pay it off quickly, keep your payments low, or prevent your rate from changing, there’s a loan out there for you. 

Step 9: Close the Sale

If everything goes well, it’s time to close the sale and celebrate! During this step, you’ll get all of the paperwork in order and sign the final documents. Once the seller received the payment, it’s time to get ready to break out the cardboard boxes and packing tape!

We hope our blog about the 9 steps to buying a home helps make the process a little easier! Again, if you want to understand your overall strength as a borrower, Mortgage Number is the first-ever platform of its kind that simplifies mortgage qualifications. It’s completely free and incredibly fast!  

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How Much House Can You Afford? | Qualify for a Mortgage

How Much House Can You Afford?

How Much House Can You Afford

Before you begin shopping around for home, you need to know what your budget is. To get an idea of how much house you can afford, you’ll want to factor in your household income, monthly debts, available savings for a down payment, and so on. Understanding your financial situation is essential because lenders tend to give out the lowest rates to people with high credit scores, substantial down payments, and low debt. You want to be confident knowing you can afford your monthly mortgage payments, even when surprise costs or emergencies come up. The good news is that interest rates are incredibly low right now, so this year is a great time to buy a house!

 

Start Crunching Numbers

To determine your budget, start by figuring out how much you (and your partner, if applicable) earn each month. Remember to include all income streams, including rental earnings, investment profits, and so on. Then you’ll want to write down your estimated housing costs and down payment. Make sure to include homeowner’s insurance costs, annual property tax, estimated mortgage interest rate, and the loan term. 

 

Next, you’ll want to estimate your expenses. You’ll want to include all the money you spend each month, including bills, groceries, entertainment, and so on. Make sure you’re accurate with how much you spend because it determines how much you can reasonably afford for a mortgage. You need to be realistic about your monthly income and expenses because you don’t want to end up with a mortgage you can’t pay. It’s best to leave some breathing room for unexpected costs or emergencies that come up.

 

What is Your Debt-to-Income Ratio?

Your debt-to-income ratio (DTI ratio) is an important metric that the bank uses to calculate the amount of money you can borrow. This ratio compares your monthly income and your monthly debt. If your debt is high relative to your income, you’ll have a higher DTI. This number is significant to lenders because it shows your ability to take on more debt. The higher your DTI, the more difficult it will be to get a mortgage. Many lenders won’t give loans to those with a DTI above 43%. Your monthly expenses such as health insurance, internet, or gym memberships aren’t included in your DTI; it’s only your debt obligations such as rent, car payment, student loans, etc.

 

We recommend paying off as much of your existing debt as possible to qualify for a mortgage and get a good interest rate. By paying off your other debts, you’ll make room for a mortgage payment and be able to manage your monthly expenses even when adding the new cost of a mortgage.

 

DTI Formula: (Total Monthly Debt / Gross Monthly Income) X 100 = DTI percentage

 

Follow the 28/36% Rule

The 28/36% rule states that people should spend no more than 36% of their gross monthly income on total debt and 28% on housing expenses. Again, debt does not include monthly expenses like your Netflix subscription. It’s a tried-and-true home affordability rule that’s agreed upon by many financial advisors. This works as a great starting point to understand if your annual income is enough to cover a mortgage. The last thing you want to do is end up with a 30-year mortgage that’s too expensive for you. 

Credit Score

Maximize Your Credit Score

Before you apply for a mortgage, it’s a good idea to get your credit score in order. You can check with one of the three big agencies, Experian, Equifax, or TransUnion (each agency gives you one free copy per year). You’ll want to review your report and check for any incorrect information or factors hurting your score. If you find mistakes, make sure to let the credit agency know as soon as possible. Be prepared to provide proof that the claims are inaccurate. 

 

Maximize Your Down Payment

The bigger your down payment, the less money lenders have to give you, which means the lower your mortgage rates. The less risky you are to the lenders, the better your rates will be. While having a down payment of 20% or more makes you an attractive borrower, you can still get a new home with less cash on hand. If you put down less than 20%, you may have to pay private mortgage insurance (PMI), but this will go away once you’ve built up equity on your home. 

 

But if you don’t have much saved up and you’re ready to buy, don’t be discouraged. You can always refinance later on at a lower rate (as long as the market conditions are favorable). If you plan on refinancing, make sure your credit score and finances are in excellent shape, so you have a good chance at refinancing quickly. The sooner you can refinance, the sooner you can trim down your monthly payments. 

 

So, How Much House Can You Afford?

When figuring out how much house you can afford, know that your budget will be determined partly by your mortgage terms. In addition to calculating your current expenses, you’ll need to get an accurate picture of your loan terms. You do this a couple of ways. You can shop around and get multiple quotes from lenders, go through a mortgage broker, or try our mortgage number calculator

 

Our calculator offers insights into how financial institutions view you as a borrower. You’ll learn about your overall strengths and weaknesses in the mortgage environment. Whether you’re a first-time homebuyer or your refinancing, knowing your mortgage number gives you an advantage when looking for a lender. You can skip the complex processes and intricate jargon and get your number immediately. Best of all, it’s completely free!

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When Is the Best Time To Pay Off Your Mortgage Early? | Mortgage Payment Calculator

When Is the Best Time To Pay Off Your Mortgage Early?

When Is the Best Time To Pay Off Your Mortgage Early

We can’t deny that purchasing a home is one of the most exciting milestones in life, but the thought of a 30-year loan hanging over your head may be unsettling. So naturally, most people want to pay this loan off as soon as possible. But when is the best time to pay off your mortgage early? Before using your bonus, raise, savings, or inheritance on your mortgage, you want to consider all of your options. For example, putting your money in another asset may give you a greater return than the amount of money you save on paying off your interest.

Conversely, you may not even be worried about maximizing your savings but are more concerned about having the peace of mind of not being in debt. In this blog, we’ll go over some things to consider when deciding whether or not to pay off your mortgage early. You’ll want to stay for the whole thing; we’ve got some pro tips and a free tool for you at the end!

Are There Prepayment Penalties?

One of the ways mortgage lenders makes money is by charging you interest on your loan. When you pay off your loan early, you’re essentially taking away some of their profit. To make up for this lost income, some lenders will charge a prepayment penalty. The penalty is sometimes equal to a percentage of the loan amount or a certain number of monthly interest payments. If you’re paying off your mortgage far in advance, the prepayment fees can add up quickly! A penalty of 2-3% can end up costing you several thousands of dollars. If your goal is to save money by paying off your loan early, you may end up losing money due to this penalty!

Will You Suddenly Become Cash-Poor?

Let’s talk about liquidity. Your home is not considered a liquid asset because it can take months to sell and turn into cash. When you start rapidly paying off your mortgage, you may be depleting your liquidity. Putting your life savings into your mortgage can put you in a tight spot. If you suddenly need money for an emergency or are put out of work for several months, it can be challenging to come up with cash. Using your credit card or taking out a personal loan will just put you back into debt. 

Instead of putting it all towards your mortgage, you may want to keep some of that extra money as an emergency fund. Focus on getting around six months’ worth of living expenses saved up before focusing on paying off your mortgage. In addition to your emergency fund, you can put your money into assets like mutual funds, U.S. Treasuries, stock, and bonds. This way, you’ll have liquid cash in addition to investments that can be easily converted when necessary.

Is Your Money Best Used Elsewhere?

While this option comes with risk, it may be worthwhile to invest your money elsewhere. The return from the stock market will likely be greater than the amount you save on your interest rate (since mortgage rates are currently at all-time lows). You could also use this money to invest in cash flow positive property, resulting in higher long-term returns. As we mentioned, this strategy does come with risks as the real estate and stock market can crash, leaving you with a loss. 

Stock Market Graph

How Will You Use the Money if You Don’t Pay Off Your Mortgage?

Let’s switch gears and make a case in favor of paying off your mortgage early. While it’s ideal to invest your extra cash into something that pays high returns, it isn’t always possible. It helps to take a realistic look at what you will most likely do with all this extra money sitting around. If you find it difficult to keep in your bank account and are spending it quickly, then paying off your mortgage is a way to force yourself to save money. You’ll want to look at your spending habits and determine the best use of your money.

Do You Need the Peace of Mind?

As we mentioned, debt looming over your head is never fun. If you want to fully own your home and don’t like the feeling of owing other people money, paying off your mortgage is a good idea. Even if it’s not the most financially profitable option, it can be mentally beneficial. It may come as a significant relief if retirement is coming up and you plan on living on a fixed income.

Happy Retired Couple

Quick Tips

If you’ve weighed the pros and cons of paying off your mortgage debt early, and you decided to go with it, we’ve got some tips for you!

  1. Pay Off Your High-Interest Debts First: Credit cards, personal loans, and car loans may come with higher interest rates than your mortgage. It might be best to put your money towards paying these off first, then focusing on your mortgage.
  2. Keep Up With Your Other Goals: You may have other financial goals, like saving for your kid’s college education or purchasing another vehicle. While it’s easy to focus only on your mortgage, you want to keep up with your other goals as well. 
  3. Don’t Forget About Retirement: While we already discussed investing, don’t forget about tax-advantaged retirement funds like a Roth IRA or 401(k). Having a great retirement fund on top of having your house paid off will make retirement a breeze. 
  4.  Change Your Payment Schedule: Switching to biweekly payments allows you to cut the rest of your loan’s lifetime in half. You’ll significantly reduce the length of your mortgage, and you’ll still be able to work towards your other financial goals.
  5. Refinance: Refinancing your mortgage can be another great option. Going from a 30-year to a 15-year mortgage can help you save on interest and get out of debt sooner.

If you’re considering refinancing your home, we offer a tool that will calculate your mortgage number for you. It will let you know what your strengths and weaknesses are in today’s mortgage environment. It offers insight into how lenders and financial institutions view you as a borrower. This insight can give you an advantage when looking for a broker or lender. It’s easy, it’s instant, and best of all, it’s completely free!

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Mortgage Calculator | Hiccups in the Home Buying Process

Hiccups in the Home Buying Process

Buy a Home

Being a first time homebuyer is tough no matter how you slice it. Regardless of if the housing market is up, down or sideways. The prospect of buying your first home is daunting. The fact remains that even if you’re in the upper echelon of salary ranges. That just won’t cut it anymore if you want to buy a home that you can live and grow in comfortably in the future.

This was how our family’s home buying experience began.

Being a first time homebuyer with a family, we set our sights set to find a home that we could grow in to understand what our price point would be. My husband and my dual 6-figure salaries and near 700 credit scores had us thinking that we could afford a decent sized home in no time. Over time though, we found out the hard way that in the current housing market, money talks; and by money, I mean a sizable down payment.

When we were told that we would have to pony up nearly $100k as a down payment for the home of our dreams, we were devastated. We worked hard to get to where we were at in our careers while keeping our credit scores in good standing. We thought that we had played by the rules. Unfortunately, it wasn’t until our home buying process that we found out that the rules for home buying had been changed after the 2008 housing market crash.

What Are Our Choices?

Once the dust settled on the predicament that we found ourselves in, we were left with a few choices. Either we settle for a shoebox of a starter home which would be smaller than the home that we were currently renting. Neither of those options appealed to us so we decided to focus all of our attention on what we could do now to secure an affordable mortgage. This would allow our family to grow without feeling cramped. That’s when we came across Mortgage Number.

Hearing a dozen different stories about mortgage qualification from a dozen different realtors, we were confused. We really needed someone who would help us understand how close or far away we were to our goal of owning a home. Mortgage Number helped us understand that if we could improve our credit scores, put down an extra $15k. Not $100k as we were told by others! That we would be great candidates for a mortgage loan. This was music to our ears!

Mortgage Number Saved Us Time and Money

Mortgage Number was able to identify our overall strengths and weaknesses in today’s mortgage environment. Giving us insight into how financial institutions view us as a borrower. When we put in our numbers in the beginning, we found a lot of red (weaknesses)! We also a lot of green (strengths). This was truly eye opening (in a good way!).

We were able to take the knowledge that we had accrued from Mortgage Number to hone in on what we needed to do to buy the home of our dreams. Instead of feeling like we were playing whack-a-mole, we had a plan and a number that helped us define our worthiness to own our first home. Which will ultimately be our forever home. We know that Mortgage Number’s ability to give us an inside look into how the financial world views us as a borrower. It ultimately saved us time and money as we continue to push forward to buy our first home.  Get your mortgage number today!