Good question! A mortgage is a loan you use to purchase a home. It’s a legal agreement in which a mortgage lender pays for your house in full with the expectation that you will repay them back (with interest) over a set period of time. Mortgages allow homebuyers to purchase homes even if they don’t have all the money immediately available to purchase them upfront.
Let’s go over a few more common terms you’ll hear: - Loan Officer - the mortgage adviser in charge of your file. They’ll help you from beginning to end. - Interest Rate - The amount of money paid for the ability to borrow money. Expressed in percentage-form. - Closing - Closing encompasses the final steps in the transfer of property ownership. The buyer signs all final documents and the seller receives funds. - Credit Score - A number that represents a consumer’s credit worthiness. Lower scores pose a greater risk of default (no longer being able to pay your mortgage). Higher scores tell lenders that you’re less likely to default.
A pre-qualification is just your mortgage adviser’s estimate on your ability to buy a home. It’s based on your credit score and some other self-reported details. A pre-qual may give you a good idea on which loan program fits you best, and maybe even how much you’ll qualify for.
A pre-approval officially confirms how much you’re able to borrow. Your income and asset documents go through a more formal review. After getting pre-approved, you’re able to take a more serious look at buying a house. If you’re not able to get pre-approved, your adviser will be able to offer some helpful tips on raising your credit score, lowering your debt, or working through any other financial obstacles preventing you from buying a home.At The Wood Group of Fairway, pre-qualifications and pre-approvals are completely free for borrowers.
Most of the time, yes! The fact is, with renting, you’ll never have a chance to earn your money back. When you buy a house, you’re making steady progress toward owning your property. When your loan term is done, you’re no longer paying a mortgage. That’ll never happen when you rent. Plus, you have the opportunity to sell your home and make some money back.
You can use our online pre-qualification tool to co loan officer and find out approximately how much you can borrow before you start shopping for a house.
Once you have that number, you can provide more information and allow your loan officer to run your credit report to verify your assets and income.
Your loan officer can also help you obtain a complete written credit approval, subject to an appraisal, before you make an offer on a house.
- Don’t start shopping for a new home until you’ve been prequalified.
- Don’t pack or ship any important documents, such as tax returns, bank statements, paystubs, and W-2s.
Prequalifying for your home loan before you begin shopping for a house can save you hours of unneeded stress and heartache. When you know how much house you can afford in advance, you can meet with your realtor, well-informed and ready to make an educated buy. In eyes of a seller, a prequalified homebuyer also appears more motivated.
Your mortgage adviser will be able to provide you the best personalized advice, but here are some basic pointers:
- Never, ever miss a payment
- Keep your credit utilization below 30%, if possible
- Don’t close old accounts
-Don’t open new accounts
That’s up to you. While a 15-year mortgage will save a lot on interest compared to a 30-year, the monthly payments will be much higher. A 30-year mortgage would allow a family to move into a nicer home and still afford the monthly payments. Your mortgage adviser can help you compare the pros and cons of both options.
Most homeowners are recommended to live at least three to five years in a home before selling it. Your home will most likely appreciate in value during this time, and you’ll have some equity in it. The goal is to offset transaction costs such as agent commissions and closing costs.
There are some simple ways to help make sure you purchase a home that will increase in value. Ask your real estate agent to show you some historical comps in the areas you’re considering buying in. You’ll be able to see how much similar homes have increased in value over the years. Location is key. Is the home near places families need convenient access to such as grocery stores, schools, shops, etc? Is it a safe place for families? How much has the area’s population grown over the last few years?
That's what we are here for. Through our Pre-Approval process, you can find out how much in loans you qualify for, and we will help you choose the best possible loan with the lowest rates possible.