Moneyadviceblog » Loanstitle_li=Credit Scoretitle_li=Money » Top 4 Things To Know About Home Loans

Are you nervous about taking out a mortgage? You’re not alone in that. Consumer studies have shown that taking out the first mortgage ranks pretty high on the stress scale- right up there with a trip to the dentist or a traffic stop for speeding. Fortunately, a little knowledge about mortgages can help reduce your anxiety and help you get a better loan. So, without further ado, let’s dive into this blog and learn more about home loans.

1. The seller can pay your closing costs in your place


When you buy a property, specific fees are part of the transaction. These include escrow fees, title insurance fees, lender fees, home appraisal services, home inspections, and more. Overall, closing costs are lower than they used to be, but they can still accumulate. The good news is that there are several ways to have someone else pay your closing costs if you run out of money or don’t want to pay them yourself.

Ask the vendor to cover your costs. It doesn’t matter if you pay $295,000 for a home and pay your own fees or if you bid $300,000 and ask the seller to pay $5,000 of your fees. Or ask the lender to cover your fees. Most lenders will agree, but you will have to pay a higher mortgage rate.

Typically, a 25 basis point (0.25%) increase in your interest rate will cover all your costs. This is called a zero closing cost mortgage. Finally, you can ask the government to cover your costs. Many programs for first-time buyers provide assistance for closing costs. Some even provide a principal subsidy.

2. You don’t (always) have to be employed for two years

If you ask a mortgage broker what kind of work history is required for a real estate loan, the automatic answer will be “two years.” That’s somewhat true, but not entirely. It really depends on your background and prospects.

A person who worked as an unpaid intern in engineering and was then offered a full-time paid position is more likely to be approved than an applicant whose work history includes a full-time job as a bartender, followed by daycare, then part-time work as a bartender, and multi-level marketing. This does not mean that both types of borrowers will not be approved, just that you will never know until you ask the question.

3. You do not have to make a 20% down payment


The minimum down payment for a mortgage loan ranges from 0% (for VA real estate loans and rural home mortgages) to 20% (for non-government loans without mortgage insurance), with many options. There are 97% real estate loans for borrowers with above-average credit scores (the conventional 97) and loans requiring only a 3.5% down payment for just about everyone else. There’s also the piggyback mortgage for buyers with 10% equity, as well as a variety of other options. You don’t have to put down 20% equity to buy a home.

4. Perfect credit score is not required

Yes, you will need a substantial down payment and a good credit score to qualify for the interest rates advertised by most lenders. However, there are a number of mortgage programs designed to help first-time buyers, who are typically younger, have lower incomes and lower credit scores, access home ownership.

For example, the Federal Housing Administration (FHA) insures mortgages for borrowers with credit scores as low as 500. In some cases, FHA also insures loans for borrowers with no credit score. Some mortgage lenders approve loans with scores below 600. So don’t worry, even if you don’t necessarily have the perfect credit score. Talk to your financial advisor or banking organization to learn more about your option.

Looking for help?


Find out what kind of home mortgage loan best fits your need, and getting help to find what you can be tricky. This is why we would advise people to get help when it comes to this. For all your mortgage support and needs, contact Sunland Capital Mortgage Corporation.

Located in Florida with over 2 decades of experience in mortgage counseling, they are leading expert loans and will advise you on the best option and lowest rates you can get on these. So what are you waiting for? Make your dreams become a reality with the help of Sunland Capital Mortgage Corporation.