Here are various mortgage options out there for your home. Going from credits that give you an increasingly steady loan rate to those that help consolidate your debt. Work with a moneylender to decide whether any option benefits you more than your present mortgage option. The amount you can manage: Consider all costs included, including the upfront installment, closing costs, your month to month mortgage installment, expenses and support, insurance and any pertinent association charges.
Length of Process
The process duration varies for each borrower and will likely take at least 30 days depending upon your circumstances. Constant communication with your mortgage banker will help keep you informed of anything that may delay the processing of your application
Budget vs. Affordability
Just because you qualify for a certain amount of financing doesn’t mean you necessarily need to spend that much on a home. Unexpected bills, a loss in income, or a change in family status can all affect your ability to make your monthly mortgage payment in the future. It’s also important to have savings and available cash for vacations, entertainment, and other one-time expenses that may not be calculated into your monthly budget. Therefore, it’s a good idea to budget for less than you can afford to help protect yourself against any future financial obstacles.
Total Cost of Home Ownership
Making the transition from renting to buying or upgrading to a larger home means more than a larger housing line item in your budget. You may need to make cosmetic changes or buy additional furniture, appliances and/or décor items to make your new house truly your home. Plus, there isn’t a landlord to call when the AC unit breaks or when the water heater springs a leak. These kinds of costs need to be factored in when determining how much home you can afford. If your wants exceed your budget, consider buying a less expensive home and financing renovations with one of Mutual Mortgage’s renovation products.
Selecting a Mortgage
There are a variety of mortgage programs available, each with its qualifications and benefits. For example, borrowers in certain rural areas may qualify for a USDA loan with no down payment required. Always contact a mortgage expert (like us) when you’re ready to begin your home search to determine your qualifications and identify what loan is right for you. This can also help you avoid problems and keep you knowledgeable about your financial situation.
Do you know what your credit score is or what is on your credit report? Your credit score is a large factor in determining whether you will be approved for a mortgage option. It also will determine what your interest rate will be. Therefore, it’s a good idea to research your score and verify the accuracy of your credit report before you apply. For more information on the importance of your credit score, visit our Understanding Credit page. To request a free annual credit report, visit AnnualCreditReport.com. Beware of other sites promising you a free credit score. These often come with hidden enrollment fees and don’t provide you with your entire credit report.
Don’t be scared off from buying a home because you think you can’t afford the down payment. There are programs available that can assist you in making your down payment, and there are many down payment options that ask for less than 20% down on a home.
Locking in a 15 or 30-year mortgage option can seem like an overwhelming commitment. But it is possible to pay down your mortgage early. By making two payments each month, you will pay more toward your principal each year. This will ultimately allow you to pay off your mortgage faster.
Mortgage Insurance is required on FHA loans and Conventional loans with a down payment of less than 20% and is typically paid monthly. This fee protects your lender in case you were to default on your loan payments. It can vary based on your down payment and/or credit score. It’s important to know your options as Mortgage Insurance will increase your monthly payment.
A prequalification gives you an idea of the size of the mortgage option you may qualify for based on the information you provide to your mortgage expert. Visit our Prequalification page to learn how a prequalification can be a powerful tool in the home buying process.
Buying after a foreclosure, bankruptcy, or short sale
Although your credit history is important, having a past foreclosure, bankruptcy, or short sale on your credit report does NOT mean you cannot qualify for a mortgage. Many factors are considered when determining mortgage option eligibility. Speak to one of our representatives today to learn more about what might qualify for based on your history!