The home buying process can create many emotions and can sometimes be confusing. Whether this is your first home or second, it is good for the buyer to be educated and prepared for the process ahead. If you are unsure of something during the process, just ask! Remember, when it comes to home buying, there are no dumb questions. Here are the top 7 frequently asked questions from home buyers.
Q: What is a “good” credit score?
A: A good credit score is 720 or higher. However, that doesn’t mean if your score is lower than a 720 we can’t help you get a loan. We have loan options that will accept lower scores.
Q: Can I buy a house with no money down?
A: Yes, we offer USDA and VA loans that do not require a down payment. The USDA loans are for borrowers with no down payment, possibly a lower credit score and lower income. Borrowers must meet property and income eligibility. VA loans are for veterans, spouses or eligible dependents.
Q: How can I establish credit history?
A: You will need to have some type of revolving and or installment debt to establish reportable credit history. Something important to note here is to ensure you make all of your payments on time. We recommend opening a credit card and pay it in full each month.
Q: Should I buy a home or continue renting?
A: Look at your financial situation. Are you prepared for the maintenance cost of homeownership? Owning a home is a big responsibility — you must make sure that you make your monthly mortgage payments on time. And if the property needs maintenance, it is now your responsibility, not the landlord’s. For more information on this, check out our blog Renting vs. Buying a Home.
Q: Do I need reserves?
A: Most loans will require that you have 3 months of mortgage payments saved as reserves.
Q: How do my student loans affect my ability to get a home loan?
A: Some loans require that one percent of the loan balance be used as a payment if the loan is currently in deferment. If there is a payment listed and you have a payment history, we may be able to count only that payment. A payment must be calculated even if the loan is in deferment.
Q: Can I calculate my estimated payments?
A: Yes, our loan calculator does the math for you. Please keep in mind that this is your principle and interest only. This won’t be your total payment as it does not include escrows (your taxes and insurance.)
When buying a home, being prepared and educated makes all the difference. It is critical that you stay organized and remain focused throughout the process. After reading through these questions, you should have a better understanding of what to expect and how to approach the home buying process. Finally, make sure you are partnering with the right lender who has years of knowledge and expertise to answer any of your questions.
Mid America Mortgage is happy to answer any questions you may have! Whether you are just starting the process or in the finishing stages, we are here to guide you every step of the way.