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Most Common Questions First-Time Home-Buyers Ask

July 21, 2023 by Linda White

Most Common Questions First-Time Home-Buyers AskBuying your first home is an exciting milestone in life, but it can also be overwhelming and filled with questions. As a first-time home buyer, you want to make informed decisions and ensure a smooth process. Below we will address some of the common questions that first-time home buyers often ask.

1. What Exactly Is a Mortgage? A mortgage is an agreement between you and a lender that allows you to borrow money to purchase or refinance a home and gives the lender the right to take your property if you fail to repay the money you’ve borrowed.

2. What is the Difference between Pre-Qualification and Pre-Approval? A Pre-Qualification is informal and can be done over the phone or internet with no obligation or paperwork to complete and will only be able to tell you roughly what you can borrow. A Pre-Approval is a formal commitment to lend, and the lender collects all required documents to verify your income, assets & credit and will give you a definite idea of what you can afford.

3. What Steps Do I Need to Take to Secure a Loan? The first step is to complete a Loan Application and provide documentation to verify the application information.

You will need to provide:

  • Pay Stubs
  • W2 Forms or Tax Returns
  • Recent Bank Statements
  • Any other documents requested by the underwriter

4.  How Can I Find Out What My Credit Report Score Is? There are several ways to obtain a copy of your credit report. You can request a free copy of your credit report from each of the three major credit reporting agencies.

5. What Are My Responsibilities During the Lending Process? The key thing to remember is to keep your financial circumstances steady during the loan process.

Here are some simple guidance tips:

  • Do not change jobs, become self-employed or quit your job.       
  • Do not acquire more debt (This includes cars, boats, jewelry, household items or furniture etc.)
  • Do not charge large amounts to your credit cards and keep all payments current.
  • Do not spend money you have set aside for closing.
  • Do not apply for loans.
  • Do not change bank accounts or make large or unusual deposits into your account.
  • Do not agree to co-sign or co-borrow with anyone during the process of your loan.

6. What Does it Mean to “Lock in a Rate?” Interest rates fluctuate day-to-day. When you lock the loan, it will guarantee that you will receive that rate for the duration of the lock.

7. What does Loan-To-Value mean? Loan-to-value is the amount of money you borrow compared to the purchase price conveyed as a percentage.

8. What Is Included in the Monthly Mortgage Payment? There are five items that are included in a mortgage payment. principal interest, property taxes, homeowners’ insurance, and mortgage insurance

9. What Is Mortgage Insurance and Why do I need It? Mortgage Insurance protects the lender if you fail to pay your mortgage and it is usually required if you put down less than 20%. There are many mortgage insurance options to fit your needs.

10. What Should I Expect on Closing Day? Be sure that you have everything that you need. At closing you will sign a lot of papers, but they will all be explained to you. BE SURE you arrive to the closing on time, and you will be guided from there.

Filed Under: Real Estate Tagged With: First Time Buyer, Mortgages, New Home

Running A Quick Financial Health Check Before You Apply For A Mortgage

May 18, 2023 by Linda White

Running A Quick Financial Health Check Before You Apply For A Mortgage Getting a mortgage is a significant financial decision, and it is crucial to ensure that you are financially prepared before applying for one. Conducting a quick financial health check before applying for a mortgage can help you determine your financial standing and your ability to afford a mortgage payment.

Here are some reasons why you should consider conducting a quick financial health check before applying for a mortgage:

  1. Check your credit score: Your credit score is an important factor that lenders consider when deciding whether to approve your mortgage application. Check your credit score to see where you stand and take steps to improve it if necessary.
  2. Review your debt-to-income ratio: Lenders will also look at your debt-to-income ratio, which is the amount of debt you have compared to your income. If your debt-to-income ratio is too high, you may not be able to qualify for a mortgage. Try to pay down debt and increase your income to improve your debt-to-income ratio.
  3. Calculate your down payment: Most lenders require a down payment of at least 20% of the purchase price of the home. Calculate how much you’ll need for a down payment and make sure you have enough savings.
  4. Determine your monthly housing costs: Take a look at your monthly income and expenses to determine how much you can afford to spend on your mortgage payment, including property taxes and insurance. Make sure you’re comfortable with the monthly cost before applying for a mortgage.
  5. Get pre-approved for a mortgage: Once you’ve completed these steps, it’s a good idea to get pre-approved for a mortgage. This will give you an idea of how much you can borrow and the interest rate you’ll receive.

Conducting a quick financial health check before applying for a mortgage is a smart move. It can help you identify any financial issues, improve your mortgage eligibility, and ensure that you are prepared to take on the financial responsibilities of homeownership.

By following these steps, you’ll be able to quickly assess your financial health to increase your chances of being approved for the loan and determine whether you’re ready to apply for a mortgage.

Filed Under: Mortgage Tagged With: Credit Check, Mortgages, Real Estate

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Linda White - Knapp Realty

Linda White

Call (702) 301-0648
NV - BS.0143690

Robert J White

NV - S.0056824

Knapp Realty
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