So you found the right home to buy, got the offer accepted, made loan application, and the lender approved your loan subject to the home appraisal and re-verification of your employment and financial status just prior to closing. Congratulations! You are well on your way to achieving your goal.
For many potential home buyers, understanding credit can be a confusing puzzle to solve. We'll try to help you put the puzzle together from the perspective of getting approved for a home mortgage.
For many potential home buyers, an FHA mortgage can be a fundamental part of their buying strategy. FHA mortgages have been around for multiple generations and have helped many people realize the dream of owning a home.
Perhaps you're preparing to buy a home. You know that your credit score is a major deciding factor in whether you will be approved, as well as what rate and terms you will be offered. The better your credit score, the better interest rate and terms the mortgage company will offer.
You have been paying all your bills on time, and trying to do everything right . . . but your credit score suddenly dropped. What happened?
Paying your bills on time is a major factor in your score, but there are some less obvious reasons your credit score may have dropped.
HOME BUYER FAQ: How much money will I need to buy a home?
Answer: It depends on several of factors, such as the price of the home, the type of mortgage you get, and what seller concessions are negotiated in your purchase agreement. In general, you will need to have enough money to cover the cost of (1) earnest money, (2) down payment, and (3) closing costs (the seller can pay all or most of your closing costs, depending on the loan).
Learn about the significant changes made by Fannie Mae to help people burdened with student debt qualify for home loans. Many first-time home buyers will be affected by these changes.
If you have been turned down for a home loan in the past because your debt-to-income ratio was too high, Fannie Mae just announced it has raised the DTI ratio from 45% to 50%. If you can document that someone else is making your student loan payments, say your parents or your employer, Fannie Mae will no longer count it toward your DTI.
Buyers are often confused about the difference between the Interest Rate and the Annual Percentage Rate (APR).
The interest rate is a percentage of the principal loan amount, and reflects the base cost of borrowing the money.
The Annual Percentage Rate (APR) takes the base interest rate and adds to it the additional costs to get the loan.
What are these additional costs?
And, why is it important and useful for the buyer to know and understand the APR?