Today I’m answering the five most common mortgage questions:
Do I need to put 20% down to buy a home?
The gold standard is 20% down, but you can still buy a house for much less than that. First-time homebuyers can purchase a property with as little as 3% down if you use a conventional loan. There are qualifications you need to meet, so verify that you fit those requirements.
Why is my mortgage interest rate higher than what I’ve seen advertised?
Take a closer look at that; do you match the qualifications needed for those rates? The lower scores are always going to be best-case scenarios: the best credit score, biggest down payment, and there may even be costs associated with obtaining that rate.
Is a 30-year fixed loan the best option?
Possibly, but there’s no single option that is best for every person. We tailor-fit every situation. If you’re planning to be in the home for a short time, it may not make sense to pay for the convenience of a 30-year fixed. We can look into other options.
What is private mortgage insurance?
For a conventional loan, private mortgage insurance is for when you put less than 20% down or have less than 20% equity in the property. You’ll have to pay for private mortgage insurance until you establish that 20% equity. It kicks in if you’re unable to pay your mortgage; it protects the lender in case you default.
What happens if I can’t pay my mortgage?
Depending on the lender, you may have a grace period of a week or so before you must make that payment. If you miss that deadline, your account becomes delinquent, which can immediately hurt your credit score. If you know you’re going to miss a payment, notify the lender in advance. Learn your options—there may be something available to help you. Being silent will never help; always ask for assistance if you’re struggling to make payments.
Speaking of asking questions, reach out to me via phone or email at firstname.lastname@example.org if you have further questions about mortgages or lending. I hope to speak with you soon.