The Inside Scoop on What is New in the Mortgage Application Process.

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Are you in the market to buy a home? Are you confused about mortgage rates, amount of a down payment and the online process of making an application?

Here you will find answers to those questions.

Features of a Traditional Home Loan

Rumor has it you must have 20% down to get a mortgage. The fact is there are programs that allow for a 3.5% down payment with FHA (Federal Housing Authority). Other lending institutions allow for a 3% down payment if the borrower had mortgage insurance.

FHA will accept borrowers with less than perfect credit. To qualify for the 3.5% down payment you must have a credit score of at least 580. If you have a credit score between 500 and 579, you can still qualify for a loan with FHA but you will need to put a 10% down payment.

When determining your down payment do not use all the money you have. You will need some money in reserve or any repairs that are needed. This way you won’t be in danger of missing a mortgage payment.

Consider a 15 year loan rather than a 30 year mortgage. Interest rates are lower with a 15 year note and the amount you repay is significantly less than with a 30 year loan. The amount per month you will pay on a 15 year note will be higher, but you will be better off in the long run.

Make sure you can comfortably pay the mortgage amount along with your car payments, and other ongoing monthly bills. Don’t base your decision on the fact that your income will likely increase over time. Base your loan decision on what you are earning now.

Paying the closing costs at the time you buy your house is ideal because you will get the very best interest rate available. If the bank pays the closing costs, the interest rate will go up and so will your monthly payment.

Don’t make any big purchases from the time you apply for the loan and the closing. The lender will check your credit score when you apply initially. They will check again right before closing. They want to ensure that no large purchases were made during that time period.

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Don’t buy a new car. Don’t change anything with your credit cards. Don’t charge crazy amounts on your credit cards. Don’t change jobs. Keep everything low key from the time your apply for the loan until you close on the house.

Alternative Lenders

Market Places and Brokers – You fill out one application. Companies like Lending Tree will return several choices of loans and interest rates. You then make the application with the company you choose.

Online Mortgage Lenders – You can go on a website, fill out an application and get an approval in less than 10 minutes. One of the biggest mortgage lenders in this sphere is Quicken Loans.

Non-bank Lenders – The big banks are shying away from making mortgage loans to first time buyers because of federal regulations. Smaller banks and local mortgage lenders are filling in the gap. They are not held to the same scrutiny by the federal government.

Contact Kinship Real Estate, your home buying friend when you need to sell fast.   We can make a fair cash offer or discuss other options so that you can sell your house as-is to us. We can close in less than 30 days. You don’t have to pay Realtors commissions.

 Kinship Real Estate is positioned to help you make the sale of your house potentially seamless. Feel free to contact us. If we can’t help your directly, we may just be able to refer you to resources that can help you.

Check the list below for the various ways to connect with us.

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