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We hope the answers below answer your questions. If not, one of our mortgage professionals would be happy to speak with you one-on-one.
Q. How can I ensure that I can afford a home?
A. As part of the process, we set an approximate maximum home purchase price and mortgage amount in line with your financial picture. Those amounts are based on your credit, income, assets and debts, and take into consideration how much you have for a down payment, as well as the affordability of monthly mortgage payments.
There are many different types of mortgages, providing a great deal of flexibility in terms of rates, terms, down payment amounts, and income and debt guidelines. We can advise you of the right loan for your needs and means. If you want to "test the waters," ask to get pre-qualified. This will give you a clear picture of what's best for you in terms of appropriate loan programs, home price range, mortgage amount and monthly mortgage payments. Also, check out our mortgage calculator so that you can quickly determine how much home you can afford.
Q. What costs are involved in a home purchase?
A. You do need to consider all costs to determine how much money you will need. There are many variables in available loan programs and closing costs. Some examples include:
With so many variables, it makes sense to consult with one of our mortgage specialists to understand potential costs for your particular situation.
Q. Why is a home inspection recommended?
A. After signing a purchase agreement, we strongly recommend hiring a professional home inspector. But it is not required. It is your decision and responsibility. An inspector can spot any problems with the home (including structural, maintenance and operational issues) that could save you headaches down the line, and even reopen price negotiations with the seller.
Q. What documents do I need?
A. To apply for a mortgage, we require proof of income and assets, as well as debt obligations and expenses. Some examples of what you need:
Q. I have the purchase agreement, now how long until closing?
A. Your purchase agreement includes a mutually agreed-upon escrow period, which is typically 30, 45 or 60 days. The escrow period is when your loan is processed. It typically defines when your mortgage closes and you take ownership. However, there is no rule that says you cannot close sooner! At New Penn, our constant aim is an expeditious closing.
Q. What exactly is a "mortgage closing?"
A. It is the time when you sign your mortgage papers and pay any remaining costs, and when we pay the seller. Highlights of the process:
Q: What is LTV or Loan-to-Value?
A: The LTV, or Loan-to-Value ratio, is the amount of your loan compared to the appraised value of your property. This ratio impacts the loan programs and rates for which you will be eligible. Lenders will generally offer better loan programs and rates to borrowers with lower LTV ratios.
Q: What is a FICO score and how important is it?
A: A FICO score is a credit score which predicts the probability that borrowers will pay their bills. A higher FICO score enables you to obtain a loan with good terms, a lower interest rate and a lower monthly payment. This score is an important part of the loan qualification process. Ask your New Penn mortgage professional about our free credit repair service. We can help you improve your credit score as part of the application process.
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