Qualfying Ratios Explained If You Are Applying For A House Mortgage

Can you qualify for a house mortgage in Hendersonville, North Carolina?  Qualifying for a mortgage is not a mystery.  It is common sense.

If you and you spouse earn $10,000 per month, does it make sense to you that you can not afford a $10,000 per month mortgage payment?  Of course you can not.  You would certainly be able to afford a $2800 ( PITI ) per month payment.  Your house payment would be 28% of your gross income.

The bank figured out a long time ago that most people will make their house payment if the total house payment is less than 28% of their total income. This is called housing expense ratio.  The bank wants your house payment to be less than 28% of your income.   If your gross income were $5000 per month, the bank would want your maximum house payment to be $1400 per month.

This seems simple enough.  There is another factor.  It is called total obligation ratio.  The way this works is the bank is concerned with your total monthly recurring obligations.

Qualifying ratios are important when getting a morgage

Let's go back to our hero that is earning $10,000 per month gross between him and his spouse.  The banks wants ALL of his payments to be less than 36% of his gross income.

Let's assume he is driving a car with a $300 a month payment .  His wife has a $200 per month car payment also.  His Visa card has a minimum payment of $100.  His Kohls credit card has a minimum payment of $100.  His Macys credit card has a minimum payment of $100.  His Sears credit  card has a minimum payment of $100.  The payment on his boat is $200 per month.

He applies to the bank for a mortgage loan to buy a new house.  The bank takes his $10,000 per month income and multiplies it by .36.  The maximum total obligations that our hero can qualify for is $3600.  Our hero has $1000 in obligations already.  The bank subtracts the $1000 from the $3600.  Our hero can qualify for $2600 per month , not $2800 based on his housing expense ratio.

Due to his other obligations, he can only qualify for $2600 house payment.  This is called total obligation ratio.  http://rondclimer.blogspot.com/2015/01/qualifying-for-real-estate-mortgage-in.html  Here is a link to more insight.

How can he get the house that he wants that costs $2800 per month?  He can put more money down to lower his monthly payments or sell his boat or pay off a couple of those credit cards.

Debt is the biggest problem in qualifying for a mortgage loan.  If you are planning on buying a house soon, start paying off debt and incur no new debt.

If you live anywhere near Hendersonville, North Carolina and want to buy a new house, call me at 828 755 6996 .  I will get you started.  If you are interested in a career selling real estate, our company, Keller Williams Realty is looking for new real estate agents.  Contact me at www.firstrealestateschool.com   I can get you started with that also. 

The North Carolina Real Estate Exam, Pass It The First Time.

     If you are soon taking the North Carolina real estate exam, heed this advice.  Last month, I had a man call me from Fayetteville.  That is a long way from Hendersonville.  He had failed the North Carolina portion of the North Carolina real estate exam eleven times.  Compute his expense on that adventure.

     He was calling me looking for advice.  He had watched my free North Carolina real estate math videos on You Tube.  He had read some of my articles.  I could feel the frustration in his voice.  He claimed that he had studied.  Here is the advice that I gave him.  I want to give you the same advice.

Ron Climer, Instructor at First Real Estate School

     If you are paying $64 to take the North Carolina real estate exam, plan on passing.  Be prepared if you do not pass.  Leave a legal pad and a pen on the seat of your car.  If you fail, before you start the car, write down as many questions as you can remember.  This information is gold.  It is never going to be fresher in your mind.

     You do not have to write down the whole question.  Write the concept.  Do you need a license to advertise a auction?  When to deposit escrow check?  What is heated living area?  When do I have to take post license course?  When does license expire?  If you take the test eleven times, you will probably see some of these questions again.  Take you textbook and thumb through it.  Remind yourself of concepts.

     If you saw words on the exam that you did not know what they meant, write them down.  Look them up in the glossary or dictionary.

     Sixty one per cent of the applicants passed the North Carolina real estate exam the first time last month.  Thirty nine per cent need to follow my advice.  Thirty nine per cent will be paying $$$$$$ to take the North Carolina real estate exam again.

     Only 27% of repeat test takers passed last month..  If you are taking the exam for the second time, follow this advice.  Your odds of passing are four to one against you.

     STUDY STUDY STUDY If you are soon taking the North Carolina real estate exam or your real estate school test for the first time soon, watch my free North Carolina real estate math videos.  There are a dozen of them.  https://www.youtube.com/watch?v=bMdJ-2iHepM     Here is a link to one.  Take my free practice test after your real estate class is almost over.  Take any other practice tests that you can find.

     Get in touch with your classmates.  Study together.  Encourage each other.  Share study aids and tips that you find.  (like this article or my math videos)

     Make flash cards.  Trade them with your classmates.  Make a deal with your classmate.  I will make fifty flashcards.  You make fifty flashcards.  We will trade flashcards Tuesday night.  Next Tuesday, we will trade back.   Make copies and do this with several friends.

First Real Estate School in Hendersonville, North Carolina

     At my Toastmasters club,http://fourseasonstoastmasters.com/ we always have a "word of the day" that we are expected to use during the weekly meeting.  Last week's word was salient.  Go to each chapter in your textbook and pick out the ten most salient points of the chapter.  Study these points.  That is what test writers do.  They want to test you on the salient ideas.

     Do not underestimate the North Carolina real estate exam. Last month's pass rate was 61%.  This is not an easy test.  Turn off the TV.  Turn off Facebook.  Turn on the study machine.  Pick up your textbook.  Watch my You Tube videos.

     If you live anywhere near Hendersonville, North Carolina, take you basic real estate course from First Real Estate School at 404 S. Main Street.  www.firstrealestateschool.com   If you wonder why our tuition is so low, it is because we are subsidized.  Here is a video to explain that.  https://www.youtube.com/watch?v=x1EpyxI_Gkg   Join us.  Call us.  Tell your friends.

Start A Lucrative Real Estate Career In Hendersonville, North Carolina

     How do you like your job?  What is the likelihood that you will double your income in the next five years?  Have you ever considered changing careers?  Selling real estate is a great way to increase your income.  Almost all real estate is sold on 100% commission.  This is a scary thought for many people.  There is no salary.  There is no boss.  There is no paid vacation.  There is no one to make you work on Saturday.  There is no paid health insurance.  Selling real estate in western North Carolina is not for sissies.

     Think about this.  Let's say you have a J.O.B. making $20 per hour.  Twenty dollars times forty hours equals eight hundred dollars per week plus your benefits.  The boss pays your health insurance and maybe pays you during vacation.  $800 per week times 52 weeks is $41,600.

     To earn $41,600 at Keller Williams Realty Mountain Partners selling houses, you would have to sell one average house per month.  Let's say you are earning $83,200 per year at your J.O.B.  You would have to sell two average houses per month at Keller Williams Realty Mountain Partners to stay the same.  If you sold two average houses at Keller Williams Realty Mountain Partners every month, you would not be getting any plaques or awards.  Plenty of your peers are doing more than two houses per month. 

     The hard part of getting started with a real estate career in Hendersonville, North Carolina is getting started.  Starting a new real estate career is like a very powerful train engine sitting still on the railroad tracks.  It takes a lot of effort to get it started.  Once it gets started, it gets momentum.  Momentum is powerful medicine.  After about five years in real estate, your career goes on autopilot.  I once had a young trainee tell me that he was going to watch Suzy Superstar that was selling ten houses per month.  He was going to see what she was doing and then do the same thing.  What he quickly discovered is that Suzy mostly just answered her phone.  Suzy had momentum.  After a few years in real estate, most of your business comes from referrals from past customers and past customers coming back to do business with you again.  That does not happen when you are brand new in real estate in Hendersonville, North Carolina.  Getting started is the hardest part of a real estate career. 

     Keller Williams Realty Mountain Partners is the best place to start a new career in real estate.  Keller Williams has the world's best training program to teach new Realtors how to get started selling houses and creating lifetime clients and gaining momentum.  Momentum is the magic.  What many Realtors figure out in three years, Keller Williams Realty Mountain Partners teaches our new Realtors in a few weeks. 

     Another very unique thing about Keller Williams Realty Mountain Partners is that you don't get started alone.  If you call me and I were instrumental in getting you started as a real estate broker at Keller Williams Realty Mountain Partners, I would receive a financial reward tied to your success.  I have a financial interest in your success.  You have an instant mentor.  You not only have a mentor that wants you succeed just to be nice, you have a mentor that has a financial stake in your success.There are very few real estate companies that implement a system like this in Hendersonville, North Carolina.  I don't know why.  It works like magic! 

     If you need to start a new career, let me suggest selling real estate.  If you need to start a new real estate career in Hendersonville, North Carolina,  let me suggest Keller Williams Realty Mountain Partners.  Call me, Ron Climer (828 755 6996 ).  Let me show you a better way to get that train engine moving.  Getting started will always be the hardest part.  If you need help getting started, contact me at www.hendersonvillekw.com    or  www.ronclimer.com 

     If you are currently enrolled in North Carolina real estate school, here is two tips for you.  To help you understand the North Carolina real estate math on the North Carolina real estate exam, watch my North Carolina real estate math videos on You Tube.  https://www.youtube.com/watch?v=wp0blrLu9xs  The second tip is, before you leave real estate school, get the name and phone number and email address for your classmates.  Get together with the smart ones and study together.  Studying together is a great way to study. Also, after you join us at Keller Williams Realty Mountain Partners, you can contact your classmates and invite them to join us too.  You will make money tied to their success.  Call me for details.