1. How Much Can I Borrow To Buy A Home?
Perhaps the most obvious question during the start of your home journey, how much can you borrow? Talk to a lender about getting pre-approved, or pre-qualified for a mortgage before you start shopping for a new home. This will ensure that the transaction and home-buying experience goes smoothly.
VA buyers and first-time homebuyers may be eligible for special programs. Ask your lender which programs you may qualify for.
2. How Much Money Do I Need To Put Down?
For FHA Loans, first time homebuyers may be required to put as little as 3.5% – so for each $100,000 you’re expecting to spend expect to put down ~ $3,500. Other loans such as VA and Conventional have different eligibility requirements.
Some Conventional loans require as little as 3% down – whiles others may require 5-10% down as a down payment. VA homebuyers may not be required to put anything down. Talk to a lender about how much money you need to put down.
3. What’s The Interest Rate?
4. What’s the Difference between a Fixed-Rate and an Adjustable-Rate Mortgage?
According to “The Language of Real Estate” by John W. Reilly, DREI (2013) – an adjustable-rate loan is a broad term for a loan (mortgage or deed of trust) with rates and terms that can change. The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, have issued guidelines allowing the issuance of real estate loans having provisions to increase or decrease the rate of interest at certain time intervals (e.g. every six months) within a certain range (e.g., 1 percent).
A fixed-rate loan is a loan with the same rate of interest for the life of the loan. Until recently, the fixed-rate loan was the predominant real estate loan, but more and more consumers are taking adjustable-rate loans. Ask your lender which loan makes the most sense for you.