In most cases, borrowers making a down payment of less than 20 percent of the purchase price of the home will need to pay for mortgage insurance. Mortgage insurance also is typically required on FHA and USDA loans. Mortgage insurance is insurance for the lender, paid for by the borrower which insures against default of the loan. If the borrower defaults on the loan, the lender will be compensated by the mortgage insurance company for a percentage of the loan amount.
There are several different DPA options available to home buyers and each has several factors that help determine whether or not someone qualifies for down payment assistance. Lenders primarily look at both income and credit, however some programs themselves have their own individual requirements. For example, some programs are reserved for first-time homebuyers only. Some require that you take a home ownership education course. To learn more about down payment assistance and see if you qualify for one of the various programs available, please contact our office and one of our knowledgeable home loan experts will help you answer any questions you might have.
A ” true” pre-approval letter is evidence that a Buyer has had a lender verify their assets ( source of funds), income stream and credit worthiness. This preliminary, and necessary step, is generally valid for 60-90 days and can be updated by re-verification of some of the documents
When someone applies for a mortgage, their credit score has the most meaningful impact on the rates they’ll be offered. Typically, the higher your score, the lower the interest rates you’ll be offered by lenders. Without a high credit score, you won’t qualify for the best mortgage rates available, which could mean you’ll end up paying more money over the term of your mortgage.
An escrow account is a temporary account held by a third party during the process of a transaction between two parties, typically a buyer and a seller. This is a temporary account as it operates until the completion of a transaction process, which is implemented after all the conditions between the buyer and the seller are settled. Many mortgage lenders hold money in escrow to pay for property taxes and insurance. Each month, the buyer pays a portion of the estimated annual costs along with the principal and interest. At the end of the year, the lender adjusts the buyers monthly escrow amount based on the actual tax and insurance bills.
Closing costs are the charges and fees that are paid when the purchase of a home is finalized. Both the buyer and seller pay closing costs to the service providers who help aid and collaborate in the transaction. Commonly, the buyers costs are mortgage insurance, homeowner’s insurance, appraisal fees and property taxes, while the seller will often pay ownership transfer fees as well as paying a commission to their real estate agent. Buyers typically negotiate with their new home’s seller to cover some of their closing costs.
Title insurance guarantees that the “title” to the property you are buying is free of any liens, judgments, encroachments or prior claims from third parties. Because a lender is co-invested in your home, they want to make sure that if any unexpected title issues arise that the title company will take care of any resulting expenses. Title companies research all recorded documents pertaining to a particular property before they will insure title. This is to protect you and the lender.
Usually the best thing to do is make a call to one of our loan officers and find out exactly how much home you can comfortably afford and which loan program would best meet your needs. We will ask you questions about your income, employment history and available assets. We will probably want to check your credit to make sure there isn’t anything on your report that needs to be taken care of before you find a home. In most cases, we will be able to advise you about what your maximum sales price/monthly payment can be and approximately how much money you will need all together to buy a home. You should have most of your questions answered after just 15 to 30 minutes of your time over the phone or here in our office with us. We are always available for face-to-face consultations.
There isn’t a simple formula or a one size fits all mortgage solution. The best choice for you will depend on a number of determining factors, including your current financial landscape and how long you intend to keep and reside in your current home. We can help you evaluate your options and help you make the most appropriate decision for your specific situation.
For most homeowners, the monthly mortgage payments include three separate parts:
If your loan requires annual or monthly mortgage insurance (MI), this will also be a part of your monthly payment.
The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
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.
With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage. The best way to select a loan product is by talking with one of our licensed Loan Experts.
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Willow Bend Mortgage Company. NMLS# 297376. 5026 Holly Road, Corpus Christi, TX 78411. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. Not all applicants will qualify for all loan products offered. This is not an offer to enter into a rate lock agreement under any applicable law.