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
Learn maximum loan amount approved for
Know payment
Good Faith Estimate (GFE)
No Cost for pre-approval
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.
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
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
What Should YOU Look For In A
Mortgage?
Interest Rate
Fixed Rate / Variable Rate
Pre-Payment Penalty
Closing Costs
Local Representative
www.wellsfargo.com/mortgage