Buying a home is one of the biggest, and best, decisions you can make in a lifetime. But knowing where to start the process doesn’t always come easy. No matter how long you shop around for a home, knowing the right questions to ask your mortgage banker in the beginning will set you up for success.
We’ve compiled an easy read to ensure you come to the lending process prepared and educated on what questions you should be asking your mortgage banker.
When applying for a mortgage loan, your lender will look at a few things: your credit history, which is broken down on your credit report and translated into your credit score, your debt-to-income ratio (DTI), which covers your income and current debts, and your funds for a down payment and assets.
The higher your credit score, the better. Your score is calculated using your payment history, outstanding balances, length of credit history, number of credit inquiries, and types of credit history (student loans, credit cards, etc.). Your lender evaluates your credit history and score to determine how risky it is to lend to you.
Based on the personal financial information you provide to your mortgage banker, he or she will walk you through the loan programs you qualify for. Each loan program has a minimum qualifying credit score and DTI ratio, along with a few other factors, so it’s really about specifics and what you feel most comfortable with. We go through an entire run down of each based off your credit score and other financial records.
Whether you have the means to put 20% down or prefer to keep some of your savings and put a smaller down payment on your new home, you have options. In general, a conventional loan will require at least 3% down. Or, if you want to avoid Private Mortgage Insurance, 20% down is required. Some government-backed loans range from 0-3.5% down, this is something that you and your mortgage banker will go over at-length. Keep in mind, there are quite a few options but knowing that there are should lend you peace of mind (and in lending).
Closing costs are items that have to be paid in order to close on your home, like property taxes, homeowner’s insurance, title search fees, appraisal fees, etc. Services completed and costs involved in the loan process all need to get paid, everything will be itemized so make sure to direct any questions you might have about the specifics to your mortgage banker.
You will find that the national average to close can be as many as 47 days. At Atlantic Bay, we pride ourselves on getting you to the closing table on average in as little as 28 days!
Obviously, you can (and should) ask as many questions as you see fit, but this is a great launching pad for you on your homebuying quest. If you’re ready to ask, we’ve got your answers contact one of our mortgage bankers at Atlantic Bay Mortgage Group® !