Can I get a mortgage?
The first step in buying a home is to get preapproved for a mortgage. The mortgage lender will analyze your annual income, your credit history, and credit score. Lenders use a calculation called debt to income to estimate the ideal mortgage payment. Debt to income is a comparison between your monthly income and monthly debts. After providing the mortgage lender with your financial information, the lender will decide which mortgage loan is best suited for you. There are four popular home loans available, FHA, VA, USDA, and Conventional mortgages. See below
The FHA loan is extremely popular due to it low down payment of 3.5% and low credit score requirements. The VA loan is a great way for a cash strapped veteran to purchase a home. The veteran loan does not require a down payment . . . 100% financing . . . and the seller is permitted to pay all closing costs on behalf of the veteran. The USDA loan does not require a down payment and the seller is permitted to pay a percentage of the buyer’s closing costs. If you intend on making a sizable down payment, take a look at the conventional loan.
Are you a first time home buyer?
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What are closing costs? What is a good faith estimate?
Closing costs are required home buying expenses. The good faith estimate is the form that lists the home buying costs. Read more