How To Get An FHA First Time Homebuyer Loan
If you’re looking to buy a home but struggling to come up with a large down payment, an FHA loan may be the solution you…
Keep readingApplying for a home loan can feel scary. That being said, the better you understand what to expect in the mortgage process the more confident you will feel in your home purchase.
There are 6 basic steps to the mortgage approval process. Pre-approval, house hunting and writing offers, loan application, mortgage processing, underwriting and approval, and closing.
One of the biggest mistakes that first-time homebuyers make is waiting to speak with an expert about their personal situation.
When filling out a mortgage application, homebuyers can expect to provide a range of information to lenders. The application process typically involves detailed questions about personal and financial circumstances. The application includes information such as job history, income verification, bank statements, tax returns, credit history, and details about any debts or liabilities. Being prepared with accurate and complete information can help streamline the application process and increase the chances of a successful mortgage approval.
Expect that when applying for a home loan, you will be required to provide various financial documents and information to lenders or mortgage providers. These documents help assess your financial stability and determine your eligibility for a home loan. Here are some common documents that you may need to provide:
It is important to understand the timelines associated with getting your loan. Here’s what the mortgage timeline usually involves, keeping in mind that delays can arise from factors outside of your control:
“How much will my monthly mortgage payment be?”
EVERY HOMEBUYER EVER
Using an online mortgage calculator can help you estimate what your monthly loan payments will look like.
It is important to know that there are various types of home loans to choose from, each with its own features and benefits. When comparing mortgages, consider factors such as interest rates, loan terms, down payment, and closing costs. If you are curious about which loan best fits your personal situation complete our Buyer Power Approval™ and we will connect you to your personal mortgage professional to review your situation.
The conventional loan remains the most popular home loan option among home buyers. Fannie Mae and Freddie Mac set the lending rules for conventional loans. Homebuyers with scores as low as 620 may qualify for 3% down payment financing.
First-time home buyers with credit scores below 620 may find it more cost-effective to use a loan backed by the Federal Housing Administration (FHA). With the FHA Loan, homebuyers may qualify with only a 3.5% down payment and a 580 credit score. FHA Loan limits do apply.
Your military service may make you eligible for a no-down payment VA Home Loan backed by the U.S. Department of Veterans Affairs (VA). The VA Loan often has lower interest rates and lower monthly payments because it does not require monthly mortgage insurance. There is no minimum credit score for the VA Loan.
Mortgage lenders assess four factors – down payment, credit score, income, and debt-to-income ratio – to determine the amount they are willing to lend you. They view your down payment as a sign of your commitment and financial ability and your credit score shows your creditworthiness. Lenders look at your income to ensure you have enough to repay the loan. They consider your debt-to-income ratio to gauge your ability to manage monthly loan payments alongside other bills.
A mortgage pre-qualification letter can be provided on the same day if the borrower submits their application and needed documentation. This letter will give you the ability to see homes with a licensed professional.
Your credit score plays a big role in the home loan amount that you approved. The higher your credit score, the better your chances you have of approval and securing favorable mortgage rates.
Some of the most common documents include proof of income, tax returns, bank statements, and employment verification. It’s important to have these documents ready and organized to streamline the application process and help ensure timely approval.
Lenders often require borrowers to show a history of consistent employment or exhibit at least two years of experience in the same field or industry.
If you’re looking to buy a home but struggling to come up with a large down payment, an FHA loan may be the solution you…
Keep readingThe homebuying process can be scary for any first-time buyer and it is no different for military families using the VA Home Loan. There is…
Keep readingIf you’re considering buying a home, the term “conventional loan” might have caught your attention. But what exactly is it, and how does it work?…
Keep readingIf you’re a first-time homebuyer or looking to purchase a home in a rural area, you may want to consider a USDA loan.
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