Mortgage Questions
Finding the answer to any big mortgage questions you have at the start of the process makes life much easier. Mortgages can be complex, especially for first-time buyers. Not fully understanding what you are signing can lead to financial issues further down the line. Comparing quotes is also difficult if you don’t know all of the terminologies.
#1 Do I need Great Credit?
Issues with credit scores are one of the most common mortgage questions. Your credit score has an impact on the amount you can borrow and the interest rate that you pay. In some cases, poor credit can lead to your application being denied. Your credit score is an indication of how responsible you are with money. It gives lenders an indication of whether you will be able to make the monthly payments. So, a low credit score indicates that you are high risk. It is still possible to get a mortgage with a low credit score, but the interest rate will be higher.
#2 How many Mortgage Quotes Should I Get?
Queries about how many quotes to get are also one of the more common questions. We are a licensed mortgage broker in the state of Florida, which means they can connect with various lenders and shop around for you so you don't have to. When we get multiple quotes, we can compare to make sure you are getting the program that should meet your needs. It also allows us to have lenders compete for your business against one another. As a result, the goal is to provide a great experience to the borrower. As a broker, we have the ability to use a single credit report to proceed, unless of course the credit report expires. So, this way you do not have to have multiple credit inquiries and pulls just to inquire. Let us work for you, why should you have to do all the work?
#3 What Type of Mortgage is for Me?
There are many different types of mortgage available. Common mortgage questions are often about which type is best. Ultimately, this depends on your personal situation. Conventional is more difficult to qualify for. An FHA loan may be easier to get. However, the FHA closing costs can be quite a bit higher due to insurance Premium. VA loans are an option choice for veterans and USDA loans could be a choice for buying real estate in rural areas. Search for a mortgage broker near me and get some professional advice to help you make a decision.
#4 How is my Mortgage Payment Calculated?
How to calculate a mortgage payment is one of the most important mortgage questions you need answered. You must have a clear idea of what the monthly cost will be so you can determine what you can afford. The principal is the amount of the loan that still needs to be repaid. Then, the interest is added on top. Taxes and insurance costs also need to be added to the monthly total. You can calculate this yourself or use an online mortgage payment calculator.
#5 What Documents do you Need?
Many people have mortgage questions about the details of the application process. More specifically, they are unsure what documentation they need. You will always need income verification. Bring tax returns from the last two years, W-2s, 1099s and some recent pay stubs). A form of ID is also required (driving license and security card, or alternatives). Lenders need proof of funds to close too, so bring bank statements. If your down payment is coming from a gift, you will need a letter to confirm the funds are a gift, not a loan. Failing to provide the correct documentation can slow your application down.
#6 How much of a Down Payment?
This is one of the more contentious mortgage questions people have. As a general rule, saving a bigger down payment is best. You will be able to borrow more and the interest rates will be more favorable. Going in with a smaller deposit can put more strain on your finances in the future. If you are having difficulty saving a deposit, look into down payment assistance programs.
These mortgage questions are all very common, especially amongst first-time buyers. The process of getting a mortgage can be daunting, so educating yourself is key. Before you start looking at mortgage quotes to buy a home, speak with a MortgageQuote.com to get some professional advice. Once your questions are answered, the process will be much easier.