Mortgage Ratios and The Home of Your Dreams in Fremont, Pleasanton, San Jose, by Clyde Brown,[ Profile.market] Real Estate Expert

Acceptable ratios are the key to affording the home of your dreams.  A ratio calculates debt and income.  Banks and other lending companies use two different ratios to determine if a borrower is able to afford the requested mortgage.  The resulting percentage of these ratios determines the eligibility of the buyer.

The first ratio a lender looks at when considering a mortgage loan application is the "housing expense ratio."  This figure takes into consideration all of the expenses associated with a specific property.  A percentage is then calculated by dividing the borrower's monthly income with the total figure associated with a specific home.  The cost of owning a home is greater than the purchase price.  Some additional expenses included in calculating the "housing expense ratio" in Fremont, Pleasanton, San Jose are:

- Mortgage principal
- Mortgage interest
- Taxes (property, school, local assessments,)
- Insurance (hazard or home owner's, mortgage)
- Home Owner's Association fees

The other ratio a lender considers when determining a borrower's ability to repay a mortgage loan is called the "total expense ratio."  This figure calculates all of the items found in the "housing expense ratio" plus all other current debt obligations of the buyer.  This figure is then divided by the gross income of the buyer to come up with a percentage ratio.

If a buyer does not have an acceptable ratio to qualify for a mortgage, there are three ways to remedy the situation.  Some lending institutions will raise the maximum allowable ratio.  If you feel you have extenuating circumstances that should be considered, this may be an option for you.  Discuss this with your lender and request the maximum ratio allowed to be raised.  Legacy Real Estate & Associates can help you find a lender willing to find a finance option for your individual needs.  Another option is to lower your monthly expenses.  Take a close look at every item in your monthly budget.  Cut out any unnecessary items.  Reduce optional memberships and recreation services to a lower package, or consider canceling all together.  This will be an easier when you put the task into perspective.  Do you want more cable channels to watch or do you want the home of your dreams in Fremont, Pleasanton, San Jose?  The third remedy is to increase your monthly income.  If possible get a part time job; dedicate that extra income toward your goal of home ownership in Fremont, Pleasanton, San Jose.  A part-time job may be the bit of extra income that will push your ratios into the acceptable range.
There is a lot of free information available to you about buying, selling, investing, or relocating in the Fremont real estate market. If you are considering buying or selling property, planning to relocate, looking for East Bay Area homes for sale, or looking for any other information about real estate in the East Bay, or the surrounding areas, please visit the most complete website dedicated to everything real estate related www.ClydeBrownHomes.com.

If you or someone you know are in need of a competent and experienced Bay Area Realtor, or have real estate or mortgage related questions, please feel free to contact me I will be more than glad to answer your questions. Call me at 800-839-0665 or email me at Clyde@ClydeBrownHomes.com. For all your East Bay cities needs including Fremont, Newark, Union City, Hayward, Oakland, Santa Clara, Milpitas, Dublin, Livermore, Pleasanton, and San Ramon. Clyde Brown Legacy Real Estate & Associates.