Most first-time homebuyer questions are usually about what credit score you need or how much downpayment you should put down. How about the other questions you should be asking your lender?
In this blog, we will be breaking down some of the less common (but still important) questions! After 20+ years in the mortgage industry, here are some questions to keep in mind:
Let’s start with a common one - What are the advantages of owning a house over renting?
A: It’s an investment! Rather than paying rent, you’ll be paying a mortgage which in the long term will build equity. More mortgage payments = more equity. Owning a home is also beneficial for tax reasons -- mortgage interest and real estate taxes are tax-deductible! And of course, the obvious, you don’t have a landlord to answer to!
Okay okay, that all sounds good. But what does a lender actually look for when approving your loan?
A: The 4 C’s - capacity, credit history, capital, and collateral. Capacity refers to your ability to actually pay back the loan aka employment verification. Credit history will be reviewed to show how well you have been paying off previous debt. Capital - this is essentially making sure you are not spending every last dollar on your new home purchase. Lastly, collateral is usually determined through an appraisal for security purposes, should you not be able to make your mortgage payments.
What’s next? Every homebuyer has an individual story so how will you know what program is right for you?
A: That’s what we are here for! With some basic information such as how much you are willing to put down, how long you plan on staying in the home, credit history, income, etc., we will find the program to best fit your needs!
How about a question you may be thinking of but have not fully considered - buying a foreclosed home. Here’s what you should know about this nontraditional purchase:
A: The main point to keep in mind is that sellers on foreclosed properties are not required to provide any sort of disclosure. This can lead to issues in repairs/damage that may be present. In order to get ahead of this, you can hire your own certified inspector so you know what you’re up against. The upside? Once you are aware of the damages, you can negotiate for a lower price or know what needs fixing beforehand.
Ready to start your homebuying journey but don’t know where to begin? Contact us to book your free consultation. We are licensed in Florida, Georgia, California, North Carolina, South Carolina, Texas, and Tennessee.