This first step is to contact your mortgage loan originator to set up a financial consultation to determine your loans..
Your borrowing limit depends on your income, credit score, debt levels and the amount of your down payment. Wholesale lenders typically use a debt-to-income ratio. Use an online mortgage calculator to estimate you affordability or speak with a mortgage loan originator.
A down payment is the initial amount you pay towards the home’s purchase price. It typically ranges from 0% to 20% of the home's price, depending on the type of loan and your financial situation.. Review your savings and budget to determine how much you can afford for a down payment.
Closing costs are fees associated with finalizing your mortgage and purchase. They usually range from 2% to 5% of the loan amount. Request a loan quote to get a better idea of the costs for your situation.
A fixed-rate mortgage has an interest rate that remains the same throughout the loan term. An adjustable-rate mortgage (ARM) has an interest rate that may change periodically based on market conditions. Assess your financial stability and future plans. If you prefer consistency, a fixed-rate mortgage might be best. If you anticipate moving or refinancing soon, an ARM could offer lower initial rates.
PMI is insurance that protects the lender if you default on the loan and is usually required if your down payment is less than 20% of the home's purchase price. Consider making a larger down payment to avoid PMI, it could save you money in the long run. If not, consider factoring in PMI costs into your budget and loan calculations.
Your credit score influences the interest rate and terms you receive. Higher scores generally lead to better rates and more favorable loan conditions. Check your credit report for errors and work on improving your score. Contact your mortgage loan originator for information to improve your credit score.
Commonly required documents include proof of income (pay stubs, tax returns), bank statements, and information about your debts and assets. Gather these documents in advance to streamline your application process. Ensure all information is accurate and up-to-date.
Pre-qualification or Loan Quote provides an estimate of how much you might be able to borrow based on basic financial information you provide. Pre-approval is a more detailed process. At Motto Mortgage Quality, we typically run a Credit Check, Verify Income, and perform an Automated Underwriting Approval before issuing a pre-approval. We recommend starting with a Loan Quote to gauge your borrowing potential, then moving to a pre-approval for a precise loan amount and stronger offer.
The mortgage process can take as little as 2 weeks when working with Motto Mortgage Quality from loan application submittal to closing. Stay in regular contact with your loan originator to ensure improve processing your loan and any potential delays.
Consider factors like loan terms, customer service and fees. It's also helpful to read reviews and ask for recommendations from friends or real estate agents. Evaluate the loan originators responsiveness, transparency and how they keep you informed. Ask about their typical timeline for getting clear to close. Trust your instincts when choosing a mortgage loan originator. You should feel comfortable with their approach, feel they genuinely care about your needs, and trust their advice.