If you’re ready for a new home and want to start the home buying process, most likely you will need a mortgage. Knowing the details about getting a mortgage and how it all works can seem daunting and sometimes a bit confusing. Here are some answers to five of the most common questions asked about the home buying process.
1. How Do I Qualify for a Loan?
You will want to find a reputable lender who will help you every step of the way and be available to answer all your mortgage questions. Your lender will need some basic financial information from you to get started. You will need to provide them with documentation that includes proof of employment, your income, your total debts and assets, and how much money you can spend for a down payment.
2. How Much Can I Afford?
The last thing you want is to buy a home that you really can’t afford. Even if you qualify for a certain amount from your lender, that does not mean that you should spend it! A good rule of thumb is to plan to spend up to 38% of your monthly gross income. There are many online mortgage calculators that can help you know how much you can afford.
3. What Different Types of Loans are Available, and Which One Should I Choose?MAKE IT YOURS
There are many different options to consider when taking out a mortgage. The most common loan types include the following:
• Fixed Rate Conventional Loans (15 or 30 year)
• Adjustable Rate Mortgage (ARM)
• Federal Housing Administration Loan (FHA)
• Department of Veterans Affairs Loan (VA)
• USDA Rural Housing Loan
There are pros and cons to each type of loan. You should discuss your options fully with your lender to help you choose the best type of loan for you. Visit Utah Home Builder Association at https://hbautah.com to learn more about the process of buying a home.
4. What Will My Monthly Payment Really Be?
Sometimes this number becomes confusing because there is more to a monthly mortgage payment besides principal and interest. Here is everything that goes into your actual monthly payment:
• Homeowner Insurance
• Property Taxes
• Private Mortgage Insurance if applicable
5. How Long Does It Take to Close on My Mortgage?
The closing process usually takes about 30 days to complete from start to finish. Once all the documentation is in place you will sign the appropriate paperwork to finalize the purchase of your home.