A Better, Smarter Mortgage For Today's Borrowers
How much can I afford to pay for a home?
To determine 'affordability' you will first need to know your gross income along with the amount of any debt outstanding and the monthly payments. Assuming it is your principal residence you are purchasing, calculate 45% of your income for use toward a mortgage payment, property taxes, home owner’s insurance and if applicable, estimated monthly condominium or home owner’s association fees will also be included in this calculation. Second, add all of your monthly minimum payments reported on your credit report, this number along with the monthly mortgage payment should be less than 57% of your gross income. Note, this is just a simple, basic guide, please call us to review your specific scenario.
What is a home inspection and should I have one done?
A home inspection is a visual examination of the property to determine the overall condition of the home. In the process, the inspector should be checking all major components (roofs, ceilings, walls, floors, foundations, crawl spaces, attics, retaining walls, etc.) and systems (electrical, heating, plumbing, drainage, exterior weather proofing, etc.). The results of the inspection should be provided to the purchaser in written form, in detail, generally within 24 hours of the inspection. A pre-purchase home inspection can add peace of mind and make a difficult decision much easier. It may indicate that the home needs major structural repairs which can be factored into your buying decision. A home inspection helps remove a number of unknowns and increases the likelihood of a successful purchase.
What is the minimum down payment needed for a home?
A minimum down payment of 3% is required to purchase a home, subject to certain maximum price restrictions. We do have Down Payment Assistance loans you may qualify for. In addition to the down payment, you must also be able to show that you can cover the applicable closing costs and pre-paid items. These generally run around 3% of the purchase price and can be paid by the Seller – contact us to find out how. You may also receive a gift for the down payment from a family member. It cannot be borrowed. Lenders will generally accept a gift from a family member as an acceptable down payment provided a letter stating it is a true gift, not a loan, is signed by the donor.
What is mortgage loan insurance?
Mortgage loan insurance is provided by ether the FHA, USDA or Private Mortgage Insurance Companies and is required for all loans with less than a 20% down payment.
What is a conventional mortgage?
A conventional mortgage is provided by the Government’s Sponsored Enterprises (GSE); Fannie Mae or Freddie Mac.
How does bankruptcy affect qualification for a mortgage?
Depending on the circumstances surrounding your bankruptcy, we have lenders who will provide a mortgage loan if the bankruptcy was more than one-year ago. Every situation is different and varies whether the loan is a Conventional, FHA, VA or USDA.
How will child support affect mortgage qualification?
Where child support and alimony are paid by you to another person, generally the amount paid out is deducted from your total income before determining the size of mortgage you will qualify for. Where child support and alimony are received by you from another person, generally the amount paid may be added to your total income before determining the size of mortgage you will qualify for, provided proof of regular receipt is available for a period of time determined by the lender.
Can I use gift funds as a down payment?
Most lenders will accept down payment funds that are a gift from family as an acceptable down payment. A gift letter signed by the donor is usually required to confirm that the funds are a true gift and not a loan.
What is a pre-approved mortgage?
A pre-approved mortgage means we have submitted your application package and supporting documents to one of our preferred lenders. They have reviewed and evaluated the loan package and have approved you for a loan assuming nothing adverse chances on your application. In summary, a pre-approved mortgage is one of the first steps a home buyer should take before beginning the buying process.
What is a down payment?
Very few home buyers have the cash available to buy a home outright. Most of us will use a mortgage to purchase the property. The down payment is that portion of the purchase price you furnish yourself. The amount of the down payment (which represents your financial stake, or the equity in your new home) should be determined well before you start house hunting. The larger the down payment, the less your home costs in the long run. With a smaller mortgage, interest costs will be lower and over time this will add up to significant savings.
How can you pay off your mortgage sooner?
There are ways to reduce the number of years to pay down your mortgage. You'll enjoy significant savings by: Selecting a non-monthly or accelerated payment schedule Increasing your payment frequency schedule Making principal prepayments Making Double-Up Payments Selecting a shorter amortization at renewal
What are the costs associated with buying a home?
First and foremost, you have to make sure you have enough money for a down payment - the portion of the purchase price that you furnish yourself. To qualify for a conventional mortgage you will need a down payment of at least 3%. However, you may qualify for a Down Payment Assistance Programs or receive a gift from a family member. There are closing costs and pre-paid items required at closing – these may be able to be paid by the Seller.
What are the monthly costs of owning a home?
Needless to say, you'll have financial responsibilities as a home owner. Your mortgage payment will consist of (some may not be applicable); Principal, Interest, monthly real estate taxes, home owners insurance, mortgage insurance and home owner’s association fees or condo fees.
What is a fixed rate mortgage?
The interest rate on a fixed-rate mortgage is set for a pre-determined term and never can change- usually between 15 and 30 years. This offers the security of knowing what you will be paying for the term selected.
What is a variable rate mortgage?
A mortgage in which payments are fixed for a period of one to seven years although and then can fluctuate each year after the initial fixed term.