Buying And Qualifying For A Home As Your Principal Residence || 2009

The interest rate now ranges between 4.375% to 5.25% ++ depending on:
Type of loan: Conventional, FHA, VA
Credit Score: For conventional financing, if the borrower's credit is lower than 740, the interest rate may be higher.
Loan to Value - For Conventional financing if you put less than 25% down on a condominium or townhome. the points are higher by .750%.
Cost: Depending if you want to buy the interest rate down, you pay more points+ origination. For example, if you select the loan at 4.375% interest, it may be at 1 point and an origination fee. A point is 1% of the loan amount. If you are borrowing $300,000, you are charged as part of the closing cost $3000.00 for each point, in this example, $6,000.00 is paid in cash at closing - 1 point, plus an origination fee.

As you know, interest rate fluctuates daily, just like the stock market. If you want to pay less points, you can select a higher interest rate. Let us assume you can borrow $300,000.00 @5%, zero points & no origination fee, your payment:

Principal and interest 5%, 30 year term: $1,610.46 Plus estimated taxes 150.00 Estimated Maintenance fees 425.00 Total monthly payment: $2,185.46

To qualify for this, the lender takes into consideration various factors; your income, savings including IRA,401K, and all debts, including credit card debts (except if you prove to the lender that you pay it off when billed), it is any and all financial income and obligations.

Lenders usually specify that your proposed housing expense does not exceed 28% of your gross income, and 33% for housing plus, other monthly obligations. The debt to income ratios are just a guideline, and lenders are routinely able to exceed these ratios. Especially, so in Hawaii where cost of living have traditionally been higher than the mainland - "Paradise Tax".

The FHA loan at this point appear to be the most attractive, with a down payment requirement of 3.5% of the purchase price. When buying in a condo/townhouse complex, however we need to be sure it is FHA approved, and has 51% or higher owner occupancy. A lender may be able to do a "Spot" FHA approval if the condominium is not yet approved, but has 51% owner-occupancy ratio and meets certain other requirements.

Your realtor works hard with your loan officer to find the perfect match. When you decide on a property, we check with your lender if there are any concerns or restrictions prior to proceeding. All the above details and information is a simplified scenario.

For more details, please contact Kay F Osman, ABR (Accredited Buyer's Representative) E-mail: dosman888@aol.com Phone: (808)523-6421 or (808) 373-7111