Understanding what you’ll be responsible for paying for in cash is good information to have before you even submit a mortgage application. The specific costs can vary depending upon the state that you live in, the cost of your home and a few other factors, but here are some basic things to consider that will contribute to your costs:

Down Payment Required for a Mortgage

In order to qualify for a mortgage, you will have to produce a down payment as a mortgage cannot cover by law the full cost of a home. The specific amount required for a down payment depends upon state guidelines as well as the type of loan. FHA mortgage loans offer the lowest down payment options for those who qualify, requiring under 3.5% of the purchase price down. Typically, first time home buyers put down less than 10% of the purchase price when they are qualified to do so.

Mortgage Closing Costs

In addition to requiring money for your mortgage down payment, you’ll need to save money for closing costs. This is something that you may be able to get paid by the seller of your new home, but as this is not something that’s guaranteed, it is wise to have some money on hand to pay for all of the costs of purchasing a home that cannot be rolled into your mortgage. If you present a mortgage lender an offer that does not include closing costs covered by the seller, often as a first time home buyer, you are required to prove that you have the money to cover them. 1.5% to 2.5% of the purchase price is a fair estimate for your closing costs, and somewhere in this range is what a mortgage lender will typically need to confirm.

A mortgage broker can help you go over the estimated amount that you’ll need to pay based on your target purchase price so you can be prepared in advance to make your first home purchase!

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With the resurgence of FHA home loans, many home owners are wondering if they can benefit from an FHA loan. The truth is that you may or may not benefit by converting your existing loan into an FHA loan when you refinance.

Some of the factors that can determine if an FHA loan is right for you:

• Loan To Value
• Home Value
• Size of Existing Loan
• Credit Score
• Amount of Cash You Want to Take Out

With the many changes that have occurred with FHA loans, it is possible that even if you didn’t qualify six months ago, there may be a loan program that is right for you.

One of our mortgage professionals can help you determine if an FHA loan is right for you quickly with no costs.

As the Real Estate and financial markets continue to move up and down, mortgage rates can also be affected. Since mortgage rates are more closely tied to the bond markets, an up or down move in the stock market may not have the result in mortgage rates that one might expects. In fact, many times the resulting mortgage rate changes are counter-intuitive.

More importantly, rates change daily and they can change quickly. Some mortgage professionals have recently noted that their rate quotes have only had shelf lives of three to four hours before market changes have deemed them inaccurate.

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How does a consumer navigate fast changing markets in order to refinance their existing loan or purchase a home with the most favorable terms possible?

1. Plan – Define your needs ahead of time, do not wait until the last minute. This is especially true of home purchases.
2. Consult – Talk to your mortgage professional on a regular basis so they can interpret recent market events to you and communicate how those events can affect you.
3. Execute – When you have defined your needs and have determined that now is the best time to move forward, don’t shop yourself out of a good loan! What does this mean? It is easy to get caught up in shopping for the best rate, but it is not uncommon for home owners to miss locking their loan at a great rate because they are in search of better rates that do not exist or that they do not qualify for. It is important to shop to insure you are getting the best rate possible, but set limits to the number of companies you are going to consider doing business with and be careful of having your credit report needlessly and more times than is necessary!

Our mortgage professionals can give you FREE loan advice to help you understand the mortgage process.

Wondering which loan is right for you? Not a problem! We can help determine which loan will fit your needs for your home purchase, refinance or debt consolidation needs.

If you have any questions, please contact us or call us!

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Another great reason to get quaified as early in the process as possible is to insure the fastest closing possible. If there are multiple offers going in on a home, you may be at a disadvantage if you are not able to secure financing quickly. Don’t wait until the last minute!

We have home purchase specialists standing by that can give you FREE home purchase finance advice. Feel free to request a FREE Rate Quote or to Contact Us directly.

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