Buying a house is probably the biggest purchase you’ll ever make. To help, we have put together a list of what you’ll need to know to apply for a mortgage so you’ll be prepared and confident when the time comes.
How can you know what type of mortgage you have if you haven’t even applied for it yet? The mortgage lender you choose will walk you through the process and help you decide what mortgage type is best for you.
Get to know these key mortgage terms:
This one is a little more self-explanatory and will coincide with the homes you are looking at with your realtor. Some types include:
There are two pieces to this part of the mortgage application.
The amount you owe when you close on your new home will depend on the house value and what type of mortgage you have, as mentioned above. For instance, if you’re buying a house for $200,000, a high ratio mortgage will require $10,000 for a down payment, whereas a conventional or low ratio mortgage will require closer to $40,000. (20% down or more.)
This is the ultimate amount of money you need to borrow after the down payment is subtracted and any closing costs, title fees, etc. are added in. Keep in mind that these fees can cost 2% of the purchase price of the home. So in the instance with the $200,000 home above, you’ll need to add another $4,000 dollars to the total due at closing or if you are a first time home buyer the fees are approximately 1%.
Credit score plays an important factor in determining interest rates.
Now that you have an idea of some of the terms and expectations involved in the mortgage process, speaking to a mortgage broker that understands today’s market is a valuable investment in purchasing or refinancing a home.
We are caring and knowledgeable experts to help you every step of the way. Contact us for more information about what our team can do for you.