4 Questions Every First Time Home Buyer in Merrick NY Should Ask
This is the biggest decision you will ever make being a First Time Home Buyer in Merrick NY can be very confusing. Hopefully this article will help clarify the process and help you make the right decision.
1) What is a Mortgage?
A mortgage is loan given by a creditor (lender) to a debtor (borrower) to purchase a personal real estate also known as a Home
A creditor will lend a debtor money to purchase real estate. The creditor will require documents that detail how the money will be paid back commonly known as the mortgage note.
This mortgage note will give specific terms as to the interest rate, the monthly payment and the length of the agreement.
Typically mortgage notes are either 15 or 30 terms but a note can be based on any term. The shorter the term the higher the mortgage payment, the longer the term the lower the payment will be and the longer tax write off you will receive.
2) Do I qualify for a Mortgage?
Understanding what type of mortgage that is being offer by the lender will help increase the probability of you being approved for a mortgage.
As of 2010 our government created Qualified Loans due to the previous financial mortgage crisis where they want the banks to offer less risky home mortgages with a debt to income ratio of 43% or less.
Recent studies have proven that over 75% of First Time Home Buyers in Merrick NY only talked with one lender prior to making a mortgage application. Getting a second or third opinion can show you options that your first lender might not have.
Lenders will generally take the following into account when determining your eligibility:
Your Credit Rating – your credit scores will help the evaluate the risk potential that is associated with your mortgage application. What is your credit score ratting:
Excellent Credit: 750 and above
Good Credit: 700 to 749
Fair Credit: 650 to 699
Poor Credit: 580 to 649
Try to talk to a mortgage professional who has the ability to pull a tri-merge credit report and review options on how to improve your score which can save you thousands of dollars over the life of your mortgage. Do not think that free online credit reports provide the same data used when qualifying for a mortgage.
What income will be used? Every lender uses variations of your income help get you approved for a mortgage. Typically your income will be based off of your previous 2 years personal tax returns know as your 1040’s. These forms show the income you state to the Federal Government which most lender will use to qualify you. There are other types of income that can be used to qualify you for a mortgage, one year tax returns, W-2’s only or an employment verification form. Speak with a mortgage professional to see which programs you might qualify for.
Down Payment You no long need 20% down to buy a home , there are programs that allow as little as 3% down in today’s lending environment. There are many new programs that allow less than 20% down that do not require any PMI payment. Shop around to find out what might the best down payment for your needs.
3) Should I use an independent mortgage broker or a bank to get my mortgage?
Most First Time Home Buyers in Merrick NY turn to their local bank for a home loan, rather than an Independent Mortgage Professional. What you might not know is that an Independent Mortgage Professional is often the best choice and they are able to offer you more options than your local bank.
Let’s review what differentiates an Independent Mortgage Professional from your Local Bank
INDEPENDENT MORTGAGE PROFESSIONAL
- Licensed mortgage expert – consistently undergoes continuous training
- Specializes in mortgages only
- Works for your best interest at all times
- Follows you loan from application to closing
- Often offers lower rates and cheaper costs due to less overhead
- Streamline the mortgage process for faster closings
- Access in evening and weekend hours
- Look for feedback or testimonials from previous client’s on-line if you cannot find any shy away from this broker
- Partners with several wholesale lenders to offer multiple loan products, allowing you to choose the best mortgage options
- Loan officers are not licensed and are not held to same standards and regulations as independent mortgage professionals in terms of testing and ongoing training
- Offer many other loan products (auto, boat, student, etc), so mortgages are not their top priority
- No access in evening and weekends
- Offer limited loan products they have in-house – may not be the best fir for your needs
- Works for the banks best interest not the borrower
- Often higher rates and costs due to over head
- Loan officers as banks are nothing more than application takers and have no control on costs or rates
- Slower approval and closing process too many levels not streamlined
- Look for feedback and testimonials from past clients online, if you cannot find them steer clear of this lender
- Misleading Advertised Rates offered for best borrowers with best credit, and large down payment typically not a first time home buyer.
4) Should I use a Real Estate Agent?
When you are ready to start looking for a home you will need to figure if you prefer to have a real estate agent represent you or if you would like to handle the whole transaction yourself.
A Real Estate agent is a professional who is licensed in the state to which you will be buying your home. They can help you throughout the whole home buying process by helping you with home viewings, negotiate offers, and assist with closing the deal.
Typically, you do not pay the Real Estate agent fee as the seller of the property does. Using an agent when making an offer can help make sure all the correct terms will, like subject to a home inspection and termite report prior to contract signing.
You do have the option to represent yourself, but doing so will take a lot of time and research. If you would like to complete negotiations and do your own research, you will learn a lot of valuable information, but you will have to be careful to make sure that you understand the entire process and all of its inclusions
Being a First Time Home Buyer in Merrick NY does not have to be overwhelming. With the right research you can make decisions specific to your situation that will help to make the process easier, stress free and uncomplicated. Remember that you should do your research through testimonial and feedback from past clients, when choosing a Lender, Mortgage Broker or Real Estate Agent. Those that do not provide this data will most likely mislead you somewhere in the transaction. Buying a home and getting a loan is contract law so any verbal promises mean nothing at all get it in writing.
We at THE MORTGAGE OUTLET pride ourselves on providing honest information so that all borrowers can make a decision as to what is best for your unique financial situation. See what our past clients have to say about the service we provide through their testimonials. We are ready to answer all of your questions so do not hesitate to call us at 631 589 3600 or email me at firstname.lastname@example.org
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