New Home Buyer FAQ
Searching for mortgage answers? We at CityWorth Mortgage have answers to all your questions. Read on to learn about the best credit for getting a mortgage, when to get pre-approved or pre-qualified, how to tell which home loan is best for you, and more in our Mortgage FAQ. Click the links for more details, and always feel free to call us with any questions we did not answer: 877-908-6250.
Which loan program is right for me?
With the myriad mortgage programs being advertised on the internet and on TV, it can be confusing for prospective home buyers to place themselves with the right loan. But here’s a big secret – don’t worry about it! Unless you belong to a specific niche like military, in which case a VA loan will almost always be the most cost effective choice, your mortgage banker will evaluate your financial background and know which program is best. Because of new regulations in the mortgage industry, working with a professional mortgage banker is more important than ever.
What credit score range will get me a mortgage?
Credit score requirements are set at the highest level of regulation. For example, the FHA requires a minimum credit score of 580 for their borrowers. However, many mortgage bankers will have their own minimum FICO levels. If you’re at 640 or above, in good financial standing, and have a sufficient down payment, you have a shot at getting approved for a mortgage. However, CityWorth Mortgage is unique because we will work with borrowers who have credit scores from 560 to 640 while others won't.
When should I get pre-qualified?
It’s useful to get pre-qualified for a mortgage before you go house hunting. While a pre-qualification does not guarantee you’ll be financed, it’s at least a vote of confidence from a lender based on a preliminary review. Getting pre-qualified or pre-approved helps realtors take you more seriously as a buyer, gives you an idea of your loan budget, and streamlines your home buying process overall. Note that sometimes a pre-qualification at minimum is required by realtors and real estate firms to enlist their services.
What’s the difference between pre-qualification and pre-approval?
Pre-qualification is a shorter process that requires little verified information from the borrower. Pre-approval is a stronger vote of confidence, but takes more time than pre-qualification because we review your credit information and verify all the information on your application to determine your ability to carry that mortgage payment.
Does pre-approval guarantee my loan?
While pre-approval is a stronger vote of confidence than pre-qualification, it does not guarantee you will be financed. It is the closest you can get prior to formal loan approval. Even after you’re pre-approved and prior to your loan closing, lenders must review your financial information again to make sure no large purchases have been made, significant new debts accrued, jobs lost, etc. We recommend you postpone any large purchases, such as buying a new car, until after your loan closes.
How do I get a loan without mortgage insurance?
VA-eligible borrowers and borrowers with at least 20% down payment do not have to pay mortgage insurance. However, if you have less than 20% down or are pursuing an FHA mortgage, you will likely carry mortgage insurance until you either hit 80% LTV (for conventional loans) or refinance.
Looking for additional reading for first time home buyers? Check out our page detailing mistakes to avoid by clicking Here.
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