First Time Home Buyer FAQ On How To Qualify For Mortgage
This Article Is About First Time Home Buyers FAQ On How To Qualify For Mortgage
It is not often home buyers purchase homes. There are many First Time Home Buyers FAQ Gustan Cho Associates Mortgage Group receive daily. Here are common First Time Home Buyers FAQ:
- What is a pre-approval?
- What is the current mortgage rates?
- What are the minimum credit score requirements?
- How much down payment is required on home purchases?
- What are the loan limits in my area?
- What is the maximum debt to income ratio requirements?
- What are mortgage overlays?
- Do all FHA, VA, USDA, Conventional Lenders have the same guidelines?
- What are closing costs
We will cover the above first time home buyers FAQ in this blog. Things that we did cover, please feel free to email us at [email protected]
Understanding The Steps Of The Home Buying And Mortgage Process
There are steps in the home buying and mortgage process. The best way to answer most first time home buyers FAQ is by explaining how the home buying process works. Here are the steps of the home buying and mortgage process:
- Qualify for a mortgage with a loan officer
- The pre-approval stage of the mortgage process is the most important step
- Borrowers who get a last-minute mortgage denial and/or stress during the mortgage process is because they were not properly qualified by their loan officers
- Loan officers should check and double check agency mortgage guidelines and their company’s overlays
- Make sure there are no credit disputes prior to issuing a pre-approval
- Make sure all documents are thoroughly reviewed
- Ask borrowers if there are any judgments, tax liens, and other public records not being reflected on credit reports
- Run file through automated underwriting system
- Make sure borrowers meet all conditions from the AUS
- How much money do I need to buy a house?
Is It True That Buying Is Cheaper Than Renting?
There are many instances where buying is cheaper than renting.
- To rent a 2 bedroom apartment, it normally costs $1,000 to $2,000 per month depending on the area
- The principal and interest on a $100,000 mortgage loan balance is $530 per month
- However, homeowners need to add mortgage insurance, property taxes, and homeowners insurance
- So on a typical $100,000 mortgage, the PITI may be $800 or so per month
- In this particular example, buying a home is cheaper than renting
- Another benefit of owning a home is that interest expense is deductible from income taxes
- Rents is not tax deductible
Homeowners can enjoy the benefit of gaining equity from their investments. As time passes, the home will appreciate and the loan balance will become lower and lower. After the mortgage term is up, the home will be free and clear with no loan balance.
How Much Money Is Needed To Purchase A Home
Home buyers can purchase homes with little to no down payment. USDA and VA Loans does not require any down payment. FHA Loans require 3% down payment. Fannie Mae and Freddie Mac require 3% to 5% down payment on conventional loans. Down payments can be gifted by family members. There are closing costs with all home purchase and refinance transactions. Most of our borrowers do not have to worry about closing costs. Closing costs can be covered with sellers concessions and/or lender credit. Contact us at 262-716-8151 or text us for faster response if you have further questions. Or email us at [email protected] We are available 7 days a week, evenings, weekends, and holidays.