Month: April 2021

This is probably one of the most-asked questions by borrowers who apply for a mortgage. The short answer is that it will depend on the type of mortgage program you elect to take and other factors, such as your down payment.

Many borrowers with both lower credit scores and lower down payments are interested in what the Federal Housing Administration (FHA) has to offer. You can get into one of these mortgages with as little as 3.5% of the purchase price as a down payment and, depending on the lender, a credit score of 620 or less.

FHA will accept credit scores under 600, but lenders who take the application may be unwilling to accept credit scores that low, at least with a 3.5% down payment. While FHA loans are easier to obtain than other types of loans, such as conventional loans (meaning those that use Fannie Mae guidelines), they can be more expensive to own.

What makes FHA loans costly to own are one-time fees and monthly premiums charged that are related to mortgage insurance.

On the conventional mortgage side, the higher your credit score, the more favorable terms you can expect. You can, in fact, get a mortgage with Fannie Mae with a credit score of 620, and they could require a down payment of 25%.

Plus, Fannie Mae puts a premium on the interest rates of borrowers with lower credit scores. Even someone with a credit score of 680 would have significantly better financing options than someone with a lower score. It really does pay to have the best credit you can before applying for a mortgage.

I am here to help you find the best mortgage program for you based on your credit profile and down payment. I am just a phone call or email away.

The mortgage business is like most any other type of business in that customer relationships are more important than the product that is being transacted. The mortgage business, however, is unlike any other business in several ways. The first is that you may finance a property maybe a handful of times in your lifetime and may feel a bit intimidated by what is happening, especially if this is your first time. The second reason that home finance is unlike any other type of business is the number of steps that need to be gone through to get the end result, meaning the closing. What people financing a home want more than anything is somebody who will keep them updated as to the progress of their loan. Getting a mortgage to the closing table may come with many twists and turns, especially on a purchase transaction, and this should be explained to you at the beginning of the process to properly set your expectations. What you as a borrower should be doing in the early meeting or meetings, even if they are virtual, is to set your expectations with your lender as to when you want to hear from them. Some borrowers want minimal communication. Others want it more regularly. Whatever you want or need, your lender should be listening to you and providing that. Call or email me, and I can help you navigate the financing of a home. I am always here for you, and I’m happy to help.