Wednesday, May 18, 2016

Mortgage FAQs

Applying for a mortgage can be both exciting and nerve-racking. If you are a first-time home buyer, there a probably a lot of things about mortgages that you don't know or understand. Your Lake of the Ozarks mortgage lender is here to answer all of your questions about mortgages. Let's take a look at some frequently asked questions and their answers:

1. What Documents Do I Need to Provide to Apply For a Mortgage?

Answer: The documentation needs can vary depending on the loan type. However, in most cases you will be required to provide income, employment and asset verification. Your mortgage lender will provide you with a list of items needed for your specific loan situation.

2. What's the Difference Between a Pre-Qualification and a Pre-Approval?

Answer: A pre-qualification is a lender's judgment of your ability to make payments on your Lake of the Ozarks home loan, based on your verbal statements regarding your income, employment, credit, etc. A pre-approval on the other hand, is the underwriting condition that you are conditionally qualified and it is subject to the lender's review of the completed application and verification of your income, assets, employment history, credit check, appraisal and other determining factors.

3. What Credit Score Do I Need to Qualify for a Mortgage?

Answer: Generally speaking, you're a good candidate for a mortgage loan if you have a credit score of 680 or above. However, the higher you can get it over 700, the lower the rate you can qualify for. There are several things you can do to boost your credit score and help improve your chances of qualifying for a great home loan. Check out our blog, "7 Tips for Building Your Credit Score" to learn more.

4. How Do I Know Which Type of Mortgage is Right for Me?

Answer: One of the most frequently asked questions is about which type of loan to get. There are many different loan options to choose from. The type that's best for you and your situation depends on several factors including: your current financial picture and how long you plan to keep your house. It's best to discuss your options with a mortgage professional.

5. Are There Any Loan Programs That Don't Require a Down Payment?

Answer: There are some programs that do not require a down payment. Depending on your credit, employment history and other factors, you may or may not qualify for one of these programs. If a down payment is something you don't think you would be able to make, talk to your mortgage lender to see what programs might be available to you.

6. How Do I Figure Out How Much House I Can Afford? 

Answer: For a general rule, you can afford a home that's 2-3 times your annual household income. However, the amount you can borrow will be based on your credit history, employment history, your current debt-to-income ratio, and the size of your down payment. Talking to a mortgage professional at the Lake of the Ozarks will help you better determine how much you can afford for your specific situation.

7. What's the Difference Between a Fixed-Rate Loan & an Adjustable-Rate Loan?

Answer: With a fixed-rate mortgage, the interest rate stays the same over the life of the loan. With an adjustable-rate mortgage (ARM), the interest rate changes periodically. Your monthly payments with a fixed-rate will stay the same, while those payments with an ARM will likely change. There are advantages and disadvantages to both types. Read more about Adjustable-Rate Mortgages here.

8. What's the Difference Between Interest Rate and Annual Percentage Rate (APR)?

Answer: The interest rate is the rate you agree to pay for your home loan. It is used to determine the interest portion of your monthly payment. The APR includes both your interest rate and your prepaid finance charges to give you an average yearly rate.

Stay tuned next week for more common mortgage FAQs! For all your home financing needs at the Lake of the Ozarks, contact the best mortgage lender at the Lake of the Ozarks at 573-746-7211. I'll discuss financing options, offer competitive interest rates and back it up with the FIRST Class Service you deserve!

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211


**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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