Prepare for home ownership with Carmel Mortgage
Buying a home requires more than just money for a down payment. You also have to be committed to taking control of your surroundings and your finances. We will work with you throughout the home-buying process to help make owning your first home as easy as possible. Together, we can help you understand how owning a home is more attainable—and easier to understand than you may realize.
Home ownership means you no longer pay monthly rent for the roof over your head. Now you own it, you can get an equity build up – not the landlord. You can do what you want with your house. Here are just a few benefits of homeownership:

• Interest Tax Deductions
  You may be able to deduct the interest on your home loan, as well as the federal (and sometimes, state) real estate taxes you pay annually. Be sure to consult your tax advisor. Because of this tax advantage, it may actually be cheaper to own than rent.
• Equity
  If the value of your property increases as you pay down your mortgage, you build equity that can be used to finance other major purchases, or as a down payment on a future home.
• A Protection Against Inflation
  Home ownership could help you counteract rising inflation. Although past performance cannot guarantee future trends, real estate has historically appreciated at a higher rate than inflation in most regions.

Let's start your home-buying journey today
Free Pre-Qualification
In a few minutes we can determine how much you can afford.
Secure Your Rate
Should you lock your mortgage loan interest rate now? Learn more about options like rate locks and float downs. One of our purchase loan experts can help you finalize your decision, would you like to speak with someone now?

Here is some important information regarding your credit
Credit reports are kept by the three major credit agencies, Experian, Equifax, and TransUnion. Among other things, they show your credit payment history.
A credit score is a number calculated by Fair Isaac based on the information in your credit report. You have three different credit scores, one for each of your credit reports.  We can help you through that process, we are not a credit repair agency, but we can help you understand the issues, and learn more about credit.

Know what you can afford
We will look at your income, debt and credit to determine the kind of loan that best suits your needs and goals. The size of your down payment will also determine how much you can afford. We will walk you through each step.

Line up cash
You will need to come up with some cash of your own.  We will pinpoint that number for you as we work through the process. Items we will consider are the proper down payment, fees and closing costs. These may include the appraisal fee, loan fees, attorney's fees, inspection fees, and the cost of a title search. Again, we help you arrive at the best possible scenario to fit your needs and goals.  There are many options available such as withdrawals from your IRA account without incurring penalties, etc.  We will help you analyze your finances to come up with the best solution.

Loan Jargon
The following three terms will help you better understand the rest of this scenario:

1. Loan-to-Value (or LTV)
   This is the loan amount as a percentage of the purchase price or appraised value (whichever is less). If you are buying a $150,000 home with $15,000 down payment you have a 90% LTV. Loans over 80% LTV require either PMI (Private Mortgage Insurance) or a combination of a 1st and 2nd mortgage which avoids the PMI.
2. Housing Ratio
   This is your total monthly housing expense (principal, interest, tax, insurance, and PMI and homeowners dues (condos if applicable) divided by your gross monthly income. Note "gross" income is "before" deductions. If you have a "W2" job your income is easy to determine. If you are self employed, please note your gross income is what you bring from your Schedule C onto line 12 of your 1040. Also, a 2 year history of consistent self-employment income is generally necessary.
3. Debt Ratio
   This is your total monthly housing expense plus your monthly payments of your installment and revolving debt. Some details here: this would include child support, alimony or separation maintenance. Any debt with fewer than 10 months to go does not count. A debt such as a "buy furniture now, make no payments until more than a year from now" does not count as long as there are 12 months to go without payments. The same applies for student loans.

Your income and credit will determine the sizeof the loan you can qualify for. You will need cash for 3 things:

1. The "Down Payment"
2. Closing Costs
   This is where many people get off track. You need to cover your one time or "non-recurring" closing costs, your "recurring" closing costs: prepaid interest, insurance, impounds if there is PMI and potential prorated property tax.
3. Reserves
   You need more than $10.00 left in the bank after you purchase. We need to see 2 months (PITI) of your total monthly housing expenses in reserve. You will want to be sure that you get together all of the cash necessary to close.

Once we have determined what size loan you will be able to qualify for and where the money is coming from we can determine how expensive a home you can afford.