The Truth
about Online Mortgage Calculators
Recently I came
across a client who was in a bit of a bind. My client had gone
through what they thought to be the proper channels for purchasing a
house. This client was also selling their house as well. This
client went online to one of the mortgage calculators the banks have
available. All that was asked of them was their income and total
debt amount. Based on this info the online calculator was able to
approve them for a mortgage of $250,000. Based upon this
information they started looking in to purchasing a home to buy.
Once they
started to get more serious about the house purchase the client figured
it would be time to go in to the bank to get an actual pre-approval on
paper. The person working on this request at the bank went online
and used the very same calculator only to come up with a similar figure.
From there my client was able to obtain a very vague pre-approval on
paper which was subject to approval by the lender, which really
means it is a rate hold only. My client based on this information
then finalized the sale of their existing home banking on the idea that
they would be able to purchase a new one, only to find out when they
actually found one that they did not qualify at the bank or anywhere
else for that matter.
It is really
important in my opinion to use a mortgage professional for the purchase
of a new home for this reason. I would not issue a pre-approval
of any kind unless I had discussed all the factors which come in to
play. The bank in the case above did not take in to consideration
the fact that there was a separation, so alimony and child support
payments, nor did they think to ask about the type of property to be
purchased as this would affect whether or not there would be condo fees
to add to their debt. In addition when asked about the total debt
amount it was not taken in to consideration the type of debt and how
much the monthly payments actually were. There are far too many
types of debts to put them all in to one category.
There are many
variables to take into consideration in order to get approved. It
is really important to discuss this with a professional to ensure that
you are given proper information. I will take in to consideration
all the variables needed to make an educated decision as to how much
you will qualify for and what you will need to do. Online
calculators are simply tools to help in determining your borrowing
ability.
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