Refinancing With Bad Credit and Low Credit Scores

First-Time Home Buyers FAQ on Qualifying For Mortgage

ByGustan Cho
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In this blog, we will cover and discuss first-time home buyers FAQ on qualifying for a mortgage. With skyrocketing home prices, many renters are seriously considering buying their first home. Home prices have been skyrocketing for the past ten years. HUD and the FHFA have been increasing FHA and conforming loan limits for the past six years. The combination of strong demand for housing and a shortage of inventory is creating a higher than average demand for housing. This is nationwide. Mortgage rates have been increasing to three year highs. The rising mortgage rates is not making a dent in the housing market. The housing market is still strong and there is no signs of any market correction.

First-Time Home Buyers FAQ on Getting Priced out of the Booming Housing Market

Many young folks and renters are fearing they will be priced out of the housing market. The increasing mortgage rates are not putting a dent in slowing down the housing market. There is a major demand for homes while there is a shortage of homes. Many first-time buyers FAQ includes what kind of money for the down payment, closing costs, credit and credit scores, and dozens of more questions which we will address in this blog. It is not often home buyers purchase homes.

First-Time Home Buyers FAQ on Buying a Home From Renters

The team at Gustan Cho Associates, empowered by NEXA Mortgage, LLC NMLS 1660690 is licensed in 48 states and has lending partnerships with over 160 wholesale mortgage lenders. Gustan Cho Associates’ regional branch NMLS 2315275 is located in Oakbrook Terrace, Illinois. We have every available mortgage option for homebuyers with great credit, poor credit, no income documentation, self-employed borrowers, and borrowers with high debt to income ratios. Gustan Cho Associates get dozens of first-time home buyers FAQ daily. We will go over the most common first-time home buyers FAQ by our borrowers.

Most Common First-Time Home Buyers FAQ on Buying a Home

There are many First-Time Home Buyers FAQ Gustan Cho Associates Mortgage receives daily. Here are common First-Time Home Buyers FAQ:

  • What is a pre-approval?
  • What are the current mortgage rates?
  • What are the minimum credit score requirements?
  • How much down payment is required on home purchases?
  • What are the loan limits in my area?
  • What is the maximum debt to income ratio requirements?
  • What are mortgage overlays?
  • Do all FHA, VA, USDA, Conventional Lenders have the same guidelines?
  • What are closing costs

We will cover the above first-time home buyers FAQ in this blog. Things that we did cover, please feel free to email us at gcho@gustancho.com.

Understanding The Steps Of The Home Buying And Mortgage Process

There are steps in the home buying and mortgage process. The best way to answer most first-time home buyers FAQ is by explaining how the home buying process works. Here are the steps of the home buying and mortgage process:

  • Qualify for a mortgage with a loan officer
  • The pre-approval stage of the mortgage process is the most important step
  • Borrowers who get a last-minute mortgage denial and/or stress during the mortgage process are because they were not properly qualified by their loan officers
  • Loan officers should check and double check agency mortgage guidelines and their company’s overlays
  • Make sure there are no credit disputes prior to issuing a pre-approval
  • Make sure all documents are thoroughly reviewed
  • Ask borrowers if there are any judgments, tax liens, and other public records not being reflected on credit reports
  • Run file through automated underwriting system
  • Make sure borrowers meet all conditions from the AUS
  • How much money do I need to buy a house?

Is It True That Buying Is Cheaper Than Renting?

There are many instances where buying is cheaper than renting. To rent a 2 bedroom apartment normally costs $1,000 to $2,000 per month depending on the area. The principal and interest on a $100,000 mortgage loan balance are $530 per month. However, homeowners need to add mortgage insurance, property taxes, and homeowners insurance.

Buying Versus Renting Price Comparison

On a typical $100,000 mortgage, the PITI may be $800 or so per month. In this particular example, buying a home is cheaper than renting. Another benefit of owning a home is that interest expense is deductible from income taxes. Rents are not tax-deductible. Homeowners can enjoy the benefit of gaining equity from their investments. As time passes, the home will appreciate and the loan balance will become lower and lower. After the mortgage term is up, the home will be free and clear with no loan balance.

How Much Money Is Needed To Purchase A Home

Homebuyers can purchase homes with little to no down payment. USDA and VA loans do not require any down payment. FHA loans require a 3% down payment. Fannie Mae and Freddie Mac require a 3% to 5% down payment on conventional loans. Down payments can be gifted by family members. There are closing costs with all home purchase and refinance transactions. Most of our borrowers do not have to worry about closing costs. Closing costs can be covered with seller concessions and/or lender credit. To qualify for a mortgage or if you have any questions about this blog on first-time home buyers FAQ, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response if you have further questions. Or email us at gcho@gustancho.com. We are available 7 days a week, on evenings, weekends, and holidays.

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