FAQs
How much house can I afford?
Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value. Give us a call, and we can help you determine exactly how much you can afford.
How much money do I need to purchase a home?
Conventional Loans generally require a minimum down-payment of 5% of the sales price although, there are specialty programs that allow for a 3% down-payment.
FHA loans offer a low down-payment option of 3.5% while USDA and VA Loans require 0% down.
Along with the down-payment, there are other fees associated with buying a new home. Examples include lender fees, title company fees, appraisals, inspections, taxes, and escrow costs. Get in touch to get more details and an example itemized breakdown of fees.
How does Pre-approval differ from Pre-Qualification?
Pre-qualification involves an informal and brief overview of your assets, income and credit. We will give you an estimate of a maximum loan amount you are qualified for based on the information you provide.
The purpose of pre-qualification is to give potential and first-time buyers an idea of their affordability range. The process is neither as accurate nor as comprehensive as a pre-approval. The latter is an intense process and formal evaluation of all your income, credit and assets that are documented and can be easily verified.
The pre-approval process involves a credit pull and some income/asset verification as requested by your Loan Officer. Your information is ran through our Desktop Underwriting engine and a decision will be made for Eligibility. Provided the decision is an Approval, your Loan Officer will be able to now provide you with the Pre-Approval Letter. This letter lets the seller and their agent know you are qualified to purchase the home.
Why is my credit important?
Before lenders decide to give you a loan, they need to know if you are willing and able to repay that loan. To assess your ability to repay, they assess your debt-to-income ratio. To assess how willing you are to repay, they use your credit score.
The most commonly used credit scores are called FICO scores, which were developed by Fair Isaac & Company, Inc. Your FICO score ranges from 350 (high risk) to 850 (low risk). Credit scores only take into account the information contained in your credit reports. They don't consider income or personal characteristics. These scores were invented specifically for this reason. Credit scoring was envisioned as a way to assess willingness to repay the loan while specifically excluding other demographic factors.
Your current debt level, past late payments, length of your credit history, and other factors are considered. Your score reflects both the good and the bad in your credit report. Late payments lower your score, but consistently making future payments on time will raise your score.
How long does the purchase process take?
Your purchase agreement will have a contracted date that the loan must close by which will generally be 30-45 days from the date of signing the contract.
What takes place on the date of loan closing?
On Closing Day, you will sign your final closing documents in the presence of a Notary. This usually takes place at a title company very close to you. Your agent and Loan Officer will always try to be there with you on closing day. Our goal is to be with you at every closing so that if there are questions, we will have answers!
Your loan officer and agent will organize the closing for you. They will also provide you information for your Escrow checks, which generally will be in the form of Cashier Checks.
After all disclosures are signed and all fees/down payment balance have been paid and the seller signs, you will be give the keys to YOUR home!
When does it make sense to refinance?
Many people still think that you should only refinance if your new interest rate will be at least one to two points below your existing one? Years ago that might have been true, but the cost of refinancing has dropped significantly recently.
If you are unsure about whether or not it is a good idea to refinance, then it may be a good idea to reach out and check with us: contact us
Keep in mind: we have a reputation for helping people understand their options and NOT refinancing!
It may be better for you to:
Get a home equity loan & keep your first mortgage intact (e.g., if 1st mortgage has a really low rate)
Recast your loan (can reduce payment, does not have refinance fees)
Restructure your debt in another way
We pride ourselves on being honest professionals. Get in touch and we look forward to helping you however we possibly can!