So, you have decided you want to buy a new home, you have weighed the pros and cons of home ownership, thought about if the timing is right for you, and investigated whether or not you can actually afford the home you want. Now what?
After a great start, there is still more work to be done! EPM can guide you every step of the way.
Getting you pre-qualified and pre-approved for a loan
The next step in planning for homeownership is understanding how you are going to finance your new home. There are certain requirements that a borrower must meet in order to be approved for home financing. EPM can help ensure that you are pre-qualified for a loan.
We will take a close look at the following:
Do you have sufficient income to pay your new mortgage and your other existing debts
Is your income consistent
How have you handled other credit obligations
Is there a large increase from your current housing expense to your new mortgage payments?
Do you have enough money available to pay the required down payment and closing costs for a new mortgage?
Is the home you want to purchase worth as much as or more than the price you agree to pay?
After we determine you qualify for a loan, you will want to look at your mortgage options. There are several options available when you’re planning on purchasing a home. Each mortgage program has its own qualifying guidelines, and they can be complex.. The loan team at EPM is here to help you understand what options are right for you when it comes to your home purchase.
While it’s important for you to know there are many options out there for you- an EPM loan originator can help you identify all the options, understand your goals, and make the most of your financial options. EPM will walk you through the pre-approval process to give you a head start to understand the price range of a home you can afford. We do this free of charge, and it helps make the loan application process more seamless.
What kind of loan should you apply for?
We are here to listen to what YOU want, whether you are more interested in a low monthly payment, or paying your mortgage off as quickly as possible, we can help you find the right loan.
Mortgage loans vary depending on your financial needs. There are fixed rate and adjustable rate loans that may benefit people who are either in it for the long haul, or people who are planning to sell within a certain period of time but want to capitalize on increased buying power.
There are also government loans vs conventional, conforming vs jumbo, and homes with or without mortgage insurance. It’s enough to make a first-time homebuyer’s head spin, so let’s break it down:
Government Vs Conventional Loans
You may qualify for an FHA or VA government secured loan that will lower the overall costs and down payments, but they come with some notable restrictions. For example, you must be a veteran to qualify for a VA loan, and FHA loans have restrictions based on the county. Conventional loans are the common loans you will get through a lender. They typically don’t come with restrictions
Conforming vs Jumbo Loans
If you have a conventional loan for single unit housing that costs less than $417,000, you have a conforming loan. If the cost is higher, you’ll need a jumbo loan that comes with higher down payment and stricter qualifying guidelines.
If you pay less than 20% down on your home, you will usually be required to purchase mortgage insurance. This protects the lender and allows them to collect some losses in the event of a loan default. There are varying ways you may choose to finance this payment within your loan. EPM mortgage experts can help you figure out.
Have more questions?
Your EPM Loan officer can help you with strategies for saving and resources for the best financing. We are available by phone or in person to guide you toward your homeownership goals. Stay tuned for the last segment in our Planning for Homeownership Series to learn more about getting you into the right home.