Do you know how much you can reasonably afford to pay for housing each month? Housing costs can be a considerably large line item on any monthly budget—so it’s a good thing Alliance Financial is in the business of making home budgets work. With our help, you’ll understand how much you can afford to spend on a land purchase, a home plan, and a final mortgage payment once your new house is built. Start the process with confidence. Apply today.
How Do We Qualify You?
Your ability to repay the mortgage is verified by your current employment and total income. Generally speaking, lenders prefer two years of employment with the same company, or at least be in the same line of work for a few years. Self employed borrowers income will be analyzed from their most recent two years of complete tax return.
Your assets verify your net worth. In addition, lenders like to see reserves, which acts like a “rainy day fund” and provide the lender with the security in knowing you can make your mortgage payment for a period of time in the unfortunate case of a loss of income. Assets include current Statements for CDs, Stocks, Bonds, 401(k)s, Life Insurance (with a cash value) & Retirement Accounts, etc.
Used to establish a willingness to repay the mortgage by verifying how you previously fulfilled your financial commitments including prior mortgages and rental payments. It also allows the lender to establish a debt to income ratio. Lenders prefer to see your total debt to be no more than 40-45% of your gross income. However, this ratio is not set in stone and can be higher with compensating factors.
How the property will be used (primary residence, second home or investment property). The type of property being financed affects the risk and willingness of repayment and therefore affects the rate and terms the lender is willing to offer.
Your specific situation is handled individually. So even if you are deficient in one area, a stronger area could make up for it. The more information we have the better we can present your loan to the lenders.