When it comes to quick and easy real estate transactions an all cash sale might be ideal, but for most people an all cash payment is not an option. That is ok — that’s what mortgages are for! Just be sure to take time to fully understand your options before you start making offers on homes.
Check out this list of frequently asked mortgage questions to get started:
1. Should I get prequalified for a home mortgage loan?
Absolutely! Getting prequalified will help you better understand your budget prior to house shopping. Plus, having prequalified documentation can motivate sellers to come down to the best price for a buyer that provides them with confidence.
2. How do I qualify for a loan?
To qualify for a mortgage, you’ll be answering a lot of questions. We call this the “get-to-know-you stage.” Once you have submitted your application, be prepared to provide proof of employment, income, debt, current assets and your planned down payment figure. Once we have this information we’ll work together to figure out the best options available to you.
3. How much home can I afford?
Everyone has a different budget based on their current situation, but generally it is recommended that you keep your monthly mortgage payment under 25 percent of your monthly take-home pay.
4. How much should I save for a down payment?
Most banks will advise you to put at least 10 percent down on a home, but if you can afford to put down more you’ll be better off in the long run. After all, financing less means you may have a lower monthly mortgage payment.
5. What does my mortgage payment include?
A typical monthly mortgage payment includes principal, interest, homeowner’s insurance and property taxes. Talk to a lender to understand how this breaks down into a monthly payment, or see an amortization schedule for different loan amounts and terms.
Need more answers? Contact a MetaBank mortgage lender for more information today — we're here to help you turn your home-buying dreams into a reality.