Frequently Asked Questions
What Are the Benefits of Buying a Home vs. Renting?
There are plenty of good reasons for buying a home: tax advantages, appreciation of investment, ease and security of ownership, ability to customize your own space, and pride of ownership. Renting a property has its advantages too, such as saving on maintenance expenses (typically covered by the landlord or property manager), and property tax.
What Is a Mortgage Pre-Approval Letter, and How Do I Get One?
A pre-approval letter is a document that you can bring to your realtor when house shopping in order to help them know your financial situation. That way, they’ll know you’re serious and able to buy with financing. A pre-approval letter implies that the bank is willing to lend you a specific amount of money to purchase your home. You can obtain a Pre-Approval letter through your Loan Officer who will guide you through the process.
How much do you need for a down payment?
Having at least 20% is ideal, but isnt always needed. Depending on what type of loan you are interested in and qualify for will determine this, as it varies depending on your credit score and income. The more money you use as a down payment, the less amount you will need to borrow, making your monthly mortgage payment lower.
What Is an Average Close Time on a Property?
Typically it takes about 30 to 60 days, on average, to close on a property, but the time frame may vary depending on several factors. The buyer, seller, and the loan you choose (Conventional, FHA, VA) impact the time required to complete the purchase.
Closing can be faster if you’re paying cash compared to financing as it eliminates the processes involved in mortgage approval.
What proof of income do you need when applying?
It depends on the loan type and how much you borrow. Most lenders require proof of earnings such as tax returns, pay stubs, and bank statements to qualify for a mortgage. All buyers, regardless of credit history, should talk to a Loan Officer before they begin house hunting. Integrity Mortgage has an experienced and knowledgeable team that can help you find the right loan for your particular needs and situation.
What is the difference between fixed-rate and adjusted-rate mortgages?
Fixed-rate mortgages have a set interest rate that is locked in for the term on the loan and terms can be 10 to 30 years. These are good for people who know what their future cash flow is going to be like. There’s no guessing game about how much you’ll need to pay every month for this kind of mortgage.
Adjustable-rate mortgages give you a lower set mortgage rate for the first few years of the loan, usually the first 5-10 years, and then increases for the rest of the loan. These are popular options if you know the property won’t be a “forever home”.
Is It Better To Take Out an FHA or a Conventional Loan for My First House?
It really depends on your personal financial situation. Contact one of the many experienced Loan Officers at Integrity Mortgage to have them analyze your situation so that they can help you find the perfect loan program to suit your needs.
An FHA loan is insured by the Federal Housing Administration and allows borrowers to qualify with as little as a 3.5% down payment. This loan is best for buyers with low credit scores who want to put minimal down on their loan.
A Conventional loan isn’t backed by the government but must conform to specific guidelines in order to be sold to Fannie Mae and Freddie Mac. These loans can require as little as 3% down and allow higher debt-to-income ratios. Borrowers must have good credit and must pay for private mortgage insurance (PMI) for down payments of less than 20%.
Do You Provide Veterans With VA Loans, USDA Loans, or Other Types of Low Down-Payment Mortgages?
YES, we do. Low down-payment mortgages for veterans are an excellent option for those in or with military experience that need access to a mortgage with little or no out-of-pocket money.
Whether USDA or VA loans, low down-payment mortgages for veterans offer many benefits that traditional homeownership loans don’t provide. They also don’t require homeowner’s insurance.
Why Is Having Good Credit Desirable When Applying for a Mortgage?
Your credit score will affect your eligibility for a mortgage. Those with a good credit score show a lender that they are low risk, as opposed to high risk- someone with a poor credit score has a history of defaulting on their credit to the lender would run a risk of the loan not being repaid. Strong credit can help lenders get better interest rates, more financing, and better terms.
What Is PMI, and How Does It Affect My Monthly Payment?
PMI stands for private mortgage insurance, which protects the lender against loss of mortgage payments in case the borrower defaults. PMI is required for any conventional home buyer with a down payment of less than 20%.
The lender becomes protected in the event of a default by ensuring that your mortgage isn’t “underwater.” PMI is removed from the mortgage once the borrower has reached the 20% threshold.