A credit score reflects your history of making on-time payments and your ability to repay debts as promised. For this reason, credit scores are one of the first things a lender is likely to look at

when approving you for a new loan (whether it is an auto loan, personal loan, or home loan). Higher credit scores and better credit history tells the lender that you are less likely to default

on the loan, which equates to you receiving a lower interest rate on your loan (less risk for lender=lower interest rate for borrower).

Below are the minimum credit score requirements for the most common loan programs:

FHA

530

Conventional

620

VA

530

Jumbo

680

In addition to your numerical credit score, negative or derogatory items on your credit report can have an effect on your ability to qualify for the loan you want. Since loan guidelines vary from program to program and frequently change, please contact me for your free mortgage credit report. We can then review the credit report together and determine if there are any

items that need to be fixed for you to qualify for the loan you want!

Every loan program requires some percentage of down payment, except VA (Veteran’s Administration Loan); so if you did not serve in the military (Active Duty or Veteran) you will need to make a down payment. With that being said, there are a couple different forms of down payment options:

Savings, Checking, 401K, Retirement, etc. – These are your own funds… your hard earned money that you have been diligently saving!

Gift Funds – Down payments may also be a gift from family members, close friends, or employer.

Down Payment Assistance – While this is an option, actually obtaining down payment assistance via Government Grant, County Grant, or State Grant is very difficult. Believe me, I have worked with clients and helped them receive down payment assistance; each year guidelines for the various assistance programs become harder to qualify for (income limits, credit requirements, and debt-to-income ratio limitations). I am happy to help you qualify for down payment assistance, just be aware that very few people actually qualify for it (while still being able to purchase the home they want, due to loan limits and debt-to-income ratios).

As far as how much of a down payment you will need, here are the minimum down payments required for the most common loan programs:

FHA - 3.5%

Conventional - 3%

VA - 0%

Jumbo - 10%

Again, these are just a few of the most common loan programs. Please schedule a consultation with me to discuss additional down payment options and various loan programs to find out which loan option is best for you!

First time buyer specials are somewhat of a myth; FHA loans have often been mis-interpreted as the “First Time Home Buyer Program.” The truth of the matter is, there is no such thing as a “1st time home buyer special/program,” and FHA loans can be used if you are buying your first home or your 5th home (it does not matter). Pertaining to FHA loans, you are allowed to have 1 FHA loan at a time, which may be used if the home is your permanent residence.

For Example: You buy your first home using an FHA loan; 2 years later you refinance that FHA loan to a Conventional loan (to lower your payment). Then 6 months later you decide to purchase a new (bigger) home and rent out your first home. You would be eligible to buy the new (bigger) home with an FHA loan because you no longer have an FHA loan and the new home you are buying is going to be your permanent residence

Your monthly payment amount is directly tied to the interest rate and loan amount of your home purchase. First, let’s talk about what makes up your total monthly mortgage payment. Read more..

Closing costs are typically about 1.5%-2% of the purchase price. Don’t worry; these closing costs can be paid by lender credit (which most clients choose), by seller’s credit (if the seller is willing to offer it), or out of pocket.

Read more..

Interest rates are a moving target and they fluctuate daily, luckily these daily fluctuations are typically very minor and virtually unnoticeable to the average consumer. For example, a daily interest rate fluctuation may look something like this:

Monday

3.625% with $1,500 in lender credit

3.75% with $3,000 in lender credit

Tuesday

3.625% with $1,700 in lender credit

3.75% with $3,200 in lender credit

In this example, interest rates (from Mon. to Tues.) have gotten better in the form of an additional $200 in lender credit at each available interest rate. This lender credit is used for your closing costs. Depending on the amount of lender credit you need to close your transaction, you can decide which interest rate is best suited for your transaction.

Because interest rates are always moving, please contact me directly for a specific rate quote based on today’s rates.

The Pre-Approval – That seems pretty simple, of course there is a little more to it, but it all starts with finding out how much you can afford/qualify for. Read more..