Redding CA - First Time Home Buyers - Getting a Pre-Approval to Purchase!

Redding CA - First Time Home Buyers - Getting a Pre-Approval to Purchase--What does it mean to get a Pre-Approval to Purchase?

Getting pre-approved means you receive a loan commitment from your mortgage company before you have found a home, based on a review of your credit and finances. Having your credit pre-approved shows sellers that you’re a qualified buyer and helps you establish a clear price range.

The process is the same as a typical mortgage application, except that your application doesn’t include property information.

What if I’ve had credit problems? Your credit history is only one factor in qualifying for a loan, and having made some late payments doesn’t have to keep you from buying a home. Someone who has consistently made payments on time in the past may have more financing options than someone who has not, but that doesn’t mean a mortgage is off-limits if you’ve had credit problems. In fact, we may be able to suggest a variety of mortgage options to help people with less-than-perfect credit become homeowners and leave credit challenges behind.  

What is the minimum down payment I can make on a home? There is no minimum down payment required for buying a home, in general. Many first-time buyers believe they must be able to put down as much as 20% of a home’s purchase price in cash. That may have been true in the past, but many of the mortgage options available to today’s home-buyers require little or no down payment. With housing prices as high as they are, homeownership would be impossible for many people if not for these low-down-payment options. We may be able to suggest a number of loan programs that can help you buy a home with little or no cash.

Will I have to pay for Private Mortgage Insurance? Private Mortgage Insurance (PMI) provides your lender with a way to recoup its investment if you are unable to repay your loan. PMI is usually required when the mortgage amount is higher than 80% of the home’s value. That means that if you buy a home with a down payment of less than 20%, you will probably have to pay for PMI. One common way of bypassing PMI without making any down payment at all is to use an 80/20 program, which combines a first mortgage with home equity financing.

What closing costs will I have to pay? Closing costs vary based on a number of factors – including the lender, mortgage type, purchase contract, and location – but they usually include the following:

• Lender fees. Your mortgage company may charge for expenses related to making the loan, including an appraisal fee, a credit report fee, origination points, and discount points.
• Third party fees. Charges for services not provided by your lender often include the settlement fee, title insurance, and attorney’s fees.
• Prepaid items. Certain mortgage costs must be paid to your lender in advance. The most common of these are pre-paid interest, hazard insurance, and deposits to set up an escrow account.

I specialize in helping First Time Home Buyers purchase their First Home!