When it comes to applying for a mortgage, most people focus on their income. But it turns out that the fastest route to getting approved for a bigger home loan is to pay off debt.
With Loftium, you can speed up this process: use Loftium for the down payment, and free up your own funds to get debt free.
Why does paying off debt matter?
Simply lowering your current debt level doesn’t help much if you still have monthly payments to make. Even if you only have $6000 remaining on your car loan, if your monthly car payment is $500, that’s $500 per month less you can put towards your mortgage. This can mean ~$100,000 less when it comes to your bank approved purchase price, all because of a $6,000 car loan.
If you have the savings to do it, totally paying off debt could be a smart move. You’ll get debt free (woo hoo!), potentially improve your credit score and likely get approved for a bigger home loan.
Think it’s impossible to pay off debt? Loftium can help.
Use Loftium’s down payment to offset the savings you put towards your debt payoff. Get debt free and get a down payment from Loftium, in one fell swoop.
What this actually looks like.
Here’s a typical example of how our homebuyers use Loftium’s down payment, pay off debt and boost their max home price:
Interested in paying off your debt and using Loftium to boost your max purchase price?
Your down payment, your way
Customize Loftium’s down payment estimates to suit your homeownership and financial goals: Airbnb multiple bedrooms, choose your contract length, and select the split of the monthly Airbnb income you take home.
Airbnb Multiple Bedrooms
Airbnb more bedrooms to get more down payment. Should you find a 3 bedroom home you love, but the price tag is too steep, Airbnb 2 bedrooms to get closer to $50,000 down.
Select an agreement length of 12, 24, or 36 months. The longer we work together, the more down payment you’ll get up-front.
Choose to receive 20%, 30%, or 40% of the monthly Airbnb income each month depending on your needs. If a bigger down payment is more important, choose a smaller split. If help with your monthly mortgage payment matters more, choose a bigger split.
Customization in action
Airbnb multiple bedrooms and choose different contract lengths for each space. Check out this example:
Get $50,000 towards your down payment when you buy a new home that has a mother in law unit, plus 2 bedrooms on the main floor.
- Airbnb the mother-in-law for 36 months and,
- 1 bedroom upstairs for 12 months
- Choose to take 30% of the Airbnb income home each month
Ways to boost your down payment
- Live in the mother-in-law, Airbnb the main living space
- Airbnb the master bedroom and bathroom
- Set up a small kitchenette in a space with a separate entrance
Start customizing today on Loftium.com
People often come to us thinking that even with $50k of down payment assistance from Loftium, they won’t be comfortable with their monthly mortgage payments based on their current income. But you might be surprised–the dream home for many Seattleites is within reach, it’s just a matter of looking in the right neighborhood.
To get you started, we’ve figured out the necessary annual income needed to purchase Loftium-eligible homes (2+ bedrooms, no HOA) in Seattle neighborhoods. Take a look:
|Neighborhood||Bottom 25% of home prices*||Monthly payment (w/ 5% down)*||Annual income (w/ 43% DTI)*|
Want to run your numbers with Loftium, personally? Schedule your sit-down to buy in a neighborhood that works for you.
And check out these great homes that sold in each neighborhood (Loftium’s down payment offers are in yellow):
*We sorted homes by price under $1,000,000 and selected the lowest 25% that sold in the last 3 months that met Loftium criteria. These numbers are based on a 5% down payment and we assumed 1.5% closing costs (but actual costs may vary). The monthly payment includes principle, interest, taxes, insurance and PMI. 43% is the max debt-to-income ratio you can have to get a conventional loan.
The opportunity cost of delaying homeownership can be substantial. When you know you want to buy sooner than your lease ends, you may feel stuck. But you’re not!
Here are some options when you’re a renter who is ready to buy and know it’s not worth the wait.
Loftium is here to help you create a custom plan of action. We’ll start with the checklist below and customize it based on your budget, timeline and home preferences. If you’re buying a primary residence in Seattle and would like to meet with us, let us know! Continue reading “Loftium homebuying plan”