10 Quick Facts About Getting a Mortgage
Buying a home can be overwhelming. Unfortunately, there are many misconceptions around the mortgage process that act as barriers to this crucial life step. We're here to dispel some of the myths surrounding the home buying process to make it as simple as possible for you to achieve your dream!
1. Most home buyers only put 3-5% down on their purchase.
That's right — many home loans only require small down payments, and some even don't require a down payment at all. You may also qualify for down payment assistance. The median sales price for homes in the Roanoke and NRV is $174,000, so a 3% down payment on a home at this price would only be $5,220! That's a much easier savings goal to reach than a 20% down payment of $34,800. Of course, there are pros and cons to each choice — that's why we encourage you to call us to see what works best for you.
2. The average credit score of a mortgage applicant is 680.
It's true that the better your credit score is, the better rate you can get on any loan. But there are many types of mortgage products out there for people of many walks of life. Many conventional loan products average around 680, but some specialized programs will accept credit scores as low as 620. You don't have to have perfect credit to buy a home. Even if you don't qualify for a conventional mortgage, Freedom First has a Mortgage Lending Officer who specializes in affordable, non-conforming home loans. Call us today, and we will help you find a loan that fits your needs.
3. Many borrowers use gifts as a source of down payment.
Almost every loan program we offer will allow a gift from an individual that is related to the borrower to help cover down payment costs, such as a gift from your parents or other family member. Call us for information on the best way to accept and document a gift from your family.
4. Many young professionals are ready to buy their first homes.
Many young professionals, including recent college graduates, are ready to purchase their first homes. As long as you've taken the appropriate steps to prepare for home ownership, you should be able to get a mortgage. Give us a call to see if you're mortgage ready. If you're not quite ready yet, we will show you the steps you need to take to get there. We will connect you with our industry partners for home buyer education classes, which will make sure you're ready to buy a home.
5. New job? You can still apply for a mortgage.
Most mortgage programs look at your work history for the last 24 months — but that doesn't mean you have to be with the same employer for 2 years. Even people who are self-employed can get a mortgage if they can prove they have been earning an income through their business for 2 years. Just give us a call so we can walk you through how to document your employment when applying for a mortgage.
6. Recently returned to the workforce? You can still apply for a mortgage.
A gap in employment doesn't automatically disqualify you from getting a mortgage. Many mortgage programs only require 6 months of employment for someone returning to the workforce. We can show you the pros and cons of these different mortgage types — just call us and we'll be happy to help!
7. Retired? You can still apply for a mortgage.
If you are retired, we will verify your income just like anyone else. Many mortgage programs accept a wide range of income sources — just call us and we will explain what qualifies and how you can document it.
8. Veterans can reuse VA eligibility for multiple mortgages.
Are you a veteran who already used your VA mortgage entitlement to buy your first house? Don't worry! Many veterans use their benefit multiple times — for their starter home, family home, and retirement home. Call us and we will explain how you can reuse your VA eligibility.
9. A real estate agent can be a valuable asset in the home buying process.
Real estate agents are trained and licensed in the home buying and selling process from start to finish. They have access to information and resources not available to the public, are experienced negotiators, and can prepare you for what's ahead in the complicated process of buying, selling, and/or closing on a home. The seller has hired an agent to represent them and you need to hire one of these experts to represent you — besides, their commission is paid by the seller.
10. We're here to help you navigate the process.
We know the home loan process, especially all the documentation, can be daunting. We are required by law to verify every item on your mortgage application, but we do everything in our power to make your home purchase as smooth as possible. If you're thinking about buying a home, call us today and we will help you from start to finish.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.