The housing market is in flux, but you’re still interested in buying a new Regal home. Understandably, though, you have questions about interest rates, mortgages, and availability.
Here’s a list of questions to ask your mortgage lender before deciding your next move!
WHAT TYPE OF LOANS ARE AVAILABLE?
There are many different types of mortgages, including:
It’s important to know which type of loans a lender can offer. Don’t be afraid to ask them to explain each one to you, along with their pros and cons. Make sure the lender is making recommendations only after finding out about your needs and qualifications. Ask why they think a specific loan would work best for you.
I AM/WE ARE RETIRED. CAN WE STILL QUALIFY FOR A MORTGAGE?
When you’re retired, instead of submitting W-2s to show income, you’re likely to indicate what kind of ongoing income you’re getting from a pension, Social Security, and 401(k) and IRA accounts. According to Freddie Mac, you may use lump-sum retirement account distributions from 401(k)s and IRAs to help determine mortgage eligibility. Lenders also can consider interest payments, Social Security income, trust funds, and dividend income. If you’re relying on assets to help you qualify, lenders can only consider 70% of the value of accounts made up of bonds, stocks or mutual funds. It’s also important to have penalty-free access to accounts, which means your age will be considered if you have an account with early withdrawal penalties.
HOW LARGE OF A DEPOSIT DO I NEED?
Interest rates, and monthly payments, vary considerably depending on the size of your down payment. It also factors into whether you’ll be required to pay mortgage insurance. Usually, companies will waive PMI (Private Mortgage Insurance) if your down payment is 20% or more of the purchase price. Some loans (i.e. VA, FHA and USDA) will allow for a down payment of zero to 3.5%, but depending on the program, they will require insurance premiums for the life of the loan.
WHAT FEES AND COSTS WILL I HAVE TO PAY?
Fees/costs generally include an appraisal, credit report, title policy, pest inspection, escrow if applicable, recording fees, and taxes. Many of these fees will be included in closing costs, once the transaction is ready to be finalized. All costs and fees should all come itemized in a Good Faith Estimate (GFE), which must be provided to you within three days of your application, as required by law.
HOW LONG WILL IT TAKE FOR A MORTGAGE TO GO THROUGH?
While it varies from lender to lender, most mortgage companies should be able to close between 30 to 45 days from application. In order to expedite this process, it’s a good idea to have all the necessary documentation ready beforehand. Stay in constant contact with your lender, getting them the relevant paperwork as soon as possible.
If you’re interested in learning more about purchasing a Regal home or navigating the mortgage process, get in touch with one of our new home specialists at 385.297.8216. We’re excited to help you find your new home!