Home Loan FAQs

Below are common mortgage questions you may have before or during the home-buying process. If you don't see the answer to your question below, let us connect with Kevin and he can get you in contact with an experienced and reputable Loan Officer to get you the information you need to make the best decision for your individual needs!

How do I qualify for a home loan?

Learning about how to obtain a home loan can be a very intimidating process especially if this is your first time buying a home, or if you are nervous to find out if you qualify. But the qualification process can actually be more simple than you think if you choose to work with a reputable lender. The process begins with something called pre-approval. 

This process involves talking with a loan officer (either in person or over the phone) and they will gather information about your circumstances to determine if you qualify for a home loan. The main factors include your credit score, income, current loans and your down payment percentage. Be prepared to provide information about: where you work, your income, debts you have, your assets and home much you plan to put down for your down payment. 

How much should I put down on a house?

The cost of buying a home can sometimes feel overwhelming and many people wonder what is a good down payment for a house and how much is needed.

It is great if you have 20% or more for the down payment of a home but lenders recognize this is not always possible. There are many ways to put down less and still get a home loan. Below are some options and it’s best to talk with a Loan Officer to see which options you qualify for and what option makes the most sense for your situation. It’s also a good idea to discuss the type of financing you qualify for with your real estate agent so they can explain how your financing can affect your home offer and the housing inventory that would qualify for each type of financing. Options include (but are not limited to): 

Federal Housing Administration (FHA) Loan: Allows a borrower to put down as little as 3.5% if you meet certain qualifications that include steady employment for at least two years and a credit score of 500 or higher. 

Department of Veteran Affairs (VA) Loan: If you are active or retired military (or a surviving spouse of a veteran), this option allows for you to put down 0%. 

USDA Loan: This type of loan is guaranteed by the United States Department of Agriculture and provides financing for properties located in designated small towns, suburbs and exurbs. It can help low- to moderate-income families achieve homeownership because of the no down payment option.

Conventional Loans: This type of loan is not insured or guaranteed by the federal government and has a slightly higher down payment than government loans. Some lenders can issue Conventional Loans with as little as 5% down.

Can I get a mortgage with no credit?

It is possible but you will have to go through a process called manual underwriting where you’ll be asked to provide more information for the underwriter to review. Your loan process can take longer and not every lender offers this.

How to choose the right mortgage lender and what type of mortgage should I get?

When it comes to choosing a lender, options include your bank, mortgage brokers, local credit union and online lenders. To find the lender that works best for you, it is best to shop around so you can compare their loan programs and all of the following for each: down payment requirements, rates, loan terms, mortgage insurance, and closing cost fees. Local lenders also tend to be more familiar with financing laws in the area and can usually give a more personalized service, so you may want to consider their location as well. 

When you talk with a Loan Officer they will review the loan options you qualify for. Mortgage options vary based on several factors including what your credit score is and how much you plan on putting down for your down payment. A reputable Loan Officer will review the pros and cons of the options you qualify for so you can make the best decision for your circumstances. 

What is a direct lender vs. a mortgage broker?

A direct lender is a bank, credit union, online entities or any other institution that provides mortgages directly to borrowers. The entire borrowing process takes place in-house and borrowers usually work with one loan officer. The downside can be that you are partnering with a lender that works standard business hours and has less flexibility if you need to reach them after hours. Rates and terms also vary widely between lenders so you may have to talk with several to determine which one is offering you the best rate and overall terms.

A mortgage broker is an independent, licensed professional who can shop several lenders on your behalf to get you the best interest rate and overall terms. Most brokers charge a small percentage of the loan amount for their services. They also tend to be a lot more flexible in reaching them after standard business hours. 

What is the difference between pre-approved and pre-qualified

The pre-qualification process is a basic overview of your ability to get a loan. You provide similar information that is needed for pre-approval but you do not provide the lender with any paperwork like a tax return to back up the information you provide them with. They are then able to give you an estimate of what you can afford. Because of the lighter screening, issues with your credit, debt-to-income ratio, etc., can surface later in the process which can delay securing a loan or restrict borrowing altogether. 

A pre-approval is a more thorough review of your financial status and history and is confirmed through bank statements, pay stubs and credit reports. A pre-approval letter is also the document that would accompany an offer to show the seller that you are a solid buyer.

What is a good FICO score to buy a house?

For the most part lenders are looking for a credit score of at least 620 to be able to secure a home loan but you still might qualify for a loan if your score is in the 500s. The down payment requirement will be different based on the type of loan you qualify for.

When should I begin to talk with a lender about how to get a mortgage?

Talking with a Loan Officer is a great first step to understand more about financing your dream home and you can connect with a lender as soon as one year out from when you plan on actually buying a home. Why? Reaching out to a lender sooner rather than later can allow for them to help you identify any issues you may have in obtaining a home loan, giving you time to fix those issues before you are ready to buy. These discussions can also help in getting you information on how much to save for your down payment, help you understand how much debt you need to pay off before buying and help some buyers understand their options based on their employment status (self-employed, part-time, switched jobs within the past year) and how that can affect their buying ability.

If you do not want to talk with a lender that far out, the minimum recommended time frame would be 6 months out. It does not cost you money to talk with a Loan Officer and you can shop different lenders to find the one that is best for you!

How much home can I afford?

You can use resources like our Mortgage Calculator tool that can be found on other pages of this website, and it will provide you with an estimated home price, monthly mortgage payment, down payment, and interest rate. To get an accurate understanding, contact Kevin, and he will connect you with a preferred, reputable lender!

Have a Home to Sell Before You Can Buy?

In today's competitive housing market it can be more challenging to buy a home if you have a home to sell before you can make your next move. Kevin and Jose Medina & Associates believe in offering clients options when it comes to selling their home. Flexibility is important to them and they understand there are unique situations which require unique solutions for their clients!

Mortgage Calculator

This mortgage calculator gives you the ability to get an estimate of how much your monthly house payment will be based on the initial mortgage, down payment, interest rate and loan term.




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