ALABAMA
Frequently Asked Questions
A person who makes $50,000 a year will be able to afford a house or property worth anywhere from $180,000 to nearly $300,000.
If you make about $50,000 a year living in the region of Alabama, USA, you will be taxed #10,190. That means your net pay will be #39,810 per year or $3,317 per month
When a private lender looks at your yearly salary, it is confirming that your mortgage and related housing expenses will not exceed more than 28% of your gross monthly income. If you were to use the 28% rule, you can definitely afford a monthly mortgage payment of $700 a month on a yearly income of $30,000.
If you are planning to afford a house that costs $200,000 with a downpayment of $40,000, you will need to earn at least $29,843 per year before tax. The monthly mortgage payment would be $696.
First time home buyers in Alabama may qualify for up to $10K for down payment. For an existing home, for example, if the first time home buyer makes $48K a year or less and the home sells for $170,000 or less, they can qualify for a loan of $7,500. A sample capital for new construction is $229,000 with up to $10,000 for the down payment.
Construction Loan offers an adjustable or fixed rate loan in which you pay interest only during the construction phase. You have the ability to borrow a substantial portion of the land value in addition to construction costs.
The best lender and construction loan in Alabama is Private Investor Money. Check our services here (insert link from website) and Contact Us (insert line from website) for your queries.
Given there is inherently more risk in financing a construction project, securing a construction loan is a more extensive process than obtaining a traditional mortgage. A construction loan approval is provided by a fully licensed builder and needs to be valid for a minimum of 60 days from the date of the lender or building contract.
A construction loan is typically higher than traditional mortgage loan rates. With a traditional mortgage, your home acts as collateral – if you default on your payments, the private lender can seize your home.
If your project goes over a budget, you will have to come up with a different out of pocket or take out a second loan to cover the overages on a construction loan. For that reason, unless you have a grasp of costs and schedule for your project, a one-time construction loan may not be right for you.
You need to finance up to 95% of the cost to build your home including land and construction cost. Down payments less than 20% will require Private Mortgage Insurance (PMI). In some cases, the cost of PMI insurance can be either reduced or eliminated depending on your loan structure.
Yes. Prior to the construction completion, you only need to make interest payments. Repayment of the original loan balance only begins once the home is completed. These loan payments are treated just like payments for a standard mortgage plan, with monthly payments based on an amortization schedule.
For instance, if a home is appraised to be worth $500K, private lenders will loan you $500K x (80% as an example) = $400K. The down payment will be your construction costs less the value of your loan. If the construction is quoted to cost $500, your down payment will be $500K – $400K = $100K.
Do expect to pay money up front for your builders, You may agree to make weekly stage payments for the building process to reach certain stages of completion. Here are other important factors you need to consider to pay your builder:
- Formal Contract.
- Paying subcontractors on time
- Avoid paying for materials upfront
- Don’t come across as desperate
- Prepare for every eventuality
- Accept things will take longer than quoted
If you desire to build a house without money down is to invest in “sweat equity” in the project. It may require patience and careful planning, but it’s feasible. Architects cost a minimum of 10% go the projected building cost, but planners can come up with buildable plans for as little as $1,500.
The minimum amount of cash you need to flip a house depends upon the size of the loan you’re looking for, as well as your income. A sample loan amount is between $12K-$15K.
The best time of the month to refinance your mortgage is the last two weeks of the month of the quarter of March, June, September, and December.
The benefit of taking out a 15-year loan is that you will score a lower interest rate on your mortgage than with a 30-year loan. When you combine that with a shorter repayment period, you will save a lot of money on interest.
If you’re interested in investing a property in Alabama, it’s best to book a consultation with our professionals at Private Investor Money. Schedule an appointment here (insert link from website).
If you have a fixed-rate mortgage when a recession starts in Alabama, it will be likely that you are overpaying on your interest rate. The reason being is because the “Bank Rate” is lower than the rate you agreed with your bank during the more prosperous times.