Six Simple questions to turn your home ownership dream into a reality.
Six Simple questions to turn your home ownership dream into a reality. We sat down with Shelby Paddock of eastcap mortgage to help get a sense of the current mortgage marketplace.
Q: Is there a good time to apply for a mortgage?
A: Considering where interest rates are at today, it is a great time to buy a home and refinance youâ€™re your existing mortgage. Â Rates will not stay this low forever, the difference 1% in an interest rates equates to tens of thousands of dollars over the life of a loan.
Q: Â What can a person do to better prepare for the pre-qualification process.
A: There is no doubt that banks today are much stricter when it comes to lending money. Â To ensure that you qualify for a mortgage, you should make sure that credit history shows that you have been responsible with credit in your past. Â A few derogatory remarks on your credit report can limit your capability to borrow from a bank, with that being said, a derogatory remark on your credit report does not automatically disqualify you from obtaining financing. Â In fact, there are a multitude of lenders that still will overlook some derogatory information with a reasonable letter of explanation.
Q: What does my debt to income ratio need to be to qualify?
A: Â Your debt to income ratio is going to determine exactly what you qualify for, max DTI ratioâ€™s are set forth by Fannie Mae, Freddie Mac, FHA, VA and USDA.
Q: Are adjustable rate mortgages a good move given the state of the low fixed rates available today?
A: Â Adjustable rate mortgages can be a good move based on a buyers situation. Â If you know for certain that you will only be in your house for a few years then an adjustable rate may be perfect for you. Â Because of the extremely low rates that adjustable mortgages are currently at, buyers will opt for this type of low rate loan to qualify for more of a house if they know that there income is going to continue to rise. Â Fixed rates on the other hand are so low, if your staying place a fixed rate may make more sense.
Q: What is happening with the 2nd home and investment property marketplace today?
A: the good news is that credit is getting easier to obtain for investments and 2nd home homes. Â You will still need a 20% down payment for a 2nd home and there are banks that are lending with 20% down on investment properties, use to be a minimum of 25% down.
Q: How much do I need to put down to get a mortgage?
A: Some programs allow for 100% financing. Â The most popular program today is by far the FHA program which requires a 3.5% down payment.
The first thing you should do if you are considering buying a house is get pre approved by a licensed mortgage professional such as myself. Â A pre-approval is easily done on a 10 minute phone call, there is essentially no need to go into a bank to obtain a mortgage anymore considering the technology available today.
Shelby Paddock is a licensed mortgage originator and expert on the mortgage industry. email@example.com (585)200-1214
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