November 20th, 2015 6:48 AM by Jackie A. Graves, President
about getting a mortgage? You're not alone.
studies have found that getting a first mortgage ranks pretty high on the
stress scale; it's right up there with going to the dentist or getting pulled
over for driving too fast.
though, a little mortgage knowledge can go a long way toward reducing your
anxiety and helping you to get a better home loan.
are five things you absolutely must know about mortgages and buying a home.
Click to see today's rates (Nov 20th, 2015)
down payment minimum range from 0% (for VA home loans and Rural Housing mortgages)
to 20 percent (for non-government loans with no mortgage insurance), with
plenty of options in between.
are 97% home loans for borrowers with above-average credit scores (the Conventional 97) and there are loans requiring just 3.5% down for just about
there is the piggyback mortgage for buyers with 10 percent to put
down, plus a host of other options including three percent down programs from
Fannie Mae and Freddie Mac, and programs such as HomeReady.
don't need to make a downpayment of 20% to purchase a home.
qualify for most lenders’ advertised rates, you need a sizable down payment and
good credit scores.
there are a lot of mortgage programs designed to make home ownership
accessible to first-time buyers, who are likely to be younger, have smaller
incomes, and carry lower credit scores.
example, the Federal Housing Administration (FHA) insures mortgages for
borrowers whose credit scores range as low as 500. And, in some cases, the FHA
will insure loans for borrowers with no credit score whatsoever.
addition, Fannie Mae and Freddie Mac, which buy and sell the majority of home
loans in the U.S., allow FICO scores down to 620, as does the Department of
Veterans Affairs with its VA loans; and the U.S. Department of Agriculture with
its USDA loans.
mortgage lenders approve loans with scores under 600.
you purchase property, there are fees which are a part of the transaction.
There are escrow fees, title insurance fees, lender costs, home appraisal
services, home inspections, and more.
closing costs are lower than what they used to be, but costs can still add up.
good news is that there are several ways to get someone else to pay your
closing costs, if you’re short of cash or just don't want to pay them yourself.
Ask the seller to pay your
shouldn’t matter whether you pay $295,000 for a home and pay your own
costs, or offer $300,000 and ask the seller to pay $5,000 of your costs.
the lender to pay your costs.
lenders will agree to this, but you’ll be asked to pay a higher mortgage
interest rate. In general, a 25 basis point (0.25%) increase in your rate will
cover your costs in full.
known as a zero-closing cost mortgage loan.
you can ask the government to pay your costs. Many first-time buyer
programs include help with closing costs. Some even offer down payment
assistance as well.
mortgage loan officer what kind of work history is required to get approved for
a home loan, and the automatic answer will be “two years.”
kinda sorta true, but not totally. It really depends on your history and
who worked as an unpaid engineering intern, and was later offered a full-time,
salaried position is more likely to get approved than an applicant whose work
history includes full-time bartending, followed by a stint at a daycare
facility, then by part-time barista work and multi-level marketing.
doesn't mean that both borrower types won't be approved, it just means that you
never know until you ask.
not a big deal.
lender and ask to be pre-approved for a home loan. You’ll learn how much you
qualify to borrow, what it will cost, and if there is anything you can do to
borrow more, or to pay less.
can be completed in a few minutes.
by GINA POGOL – To view the original
article click here