It's June! And that means that it's time to celebrate National Homeownership Month! Here at Sierra Pacific Mortgage, we want to help make the home buying process easier and more transparent. Check out some of our recent blog posts to help get a better idea of how the home buying process works!
Today, I'm outlining the top 3-mortgage questions from borrowers looking to buy a home. If you have a particular question or scenario, I'm happy to answer any mortgage questions you have, too- just give me a call.
Do I always need a 20% down payment to purchase a home?
No you do not! Nowadays you might be able to purchase a home, even if you do not have a 20-percent down payment. However, you may need to pay something called Mortgage Insurance (MI).
Mortgage Insurance is different than you're required homeowners insurance policy, in that it protects the lien-holder of your mortgage note against a possible default. However, having to pay MI does not, by itself, cause you to be eligible or ineligible to purchase a home- there are still other qualifying factors that must be considered.
There are also several other options to consider that require a much lower down payment. In some cases, you may be eligible for a loan with a down payment as low as 3% or even no down payment at all!
Can I still purchase a home without having a perfect credit score?
While having a low credit score will not allow you to get the best possible rates, it is not necessarily a deal-breaker
A credit score is not the only qualifying factor a mortgage lender will use to determine your eligibility. In fact, there are many programs that aim to help those with lower credit scores to be eligible to purchase a home.
If you aren’t looking to purchase a home quickly, it is always wise to try to increase your credit score as much as possible before starting the process. This may help save money in the future.
Some simple tips to help you improve your credit score:
- Always pay your bills on-time!
- Try to pay as much as you can so that you have a lower your debt-to-income ratio. Lenders like to see you owing only about 10% to 30% of your available credit.
- Furthermore, it's very wise to consult your mortgage professional to ensure any changes to your credit do not negatively impact your credit score. For example, many borrowers think that closing an under-utilized credit account will help increase their score. This may not always be true! Your length of credit history for each account is one of the major factors that helps to make up your credit score. Removing a long-term credit account, may actually have the opposite affect, and lower your score.
If you do not know where you stand with your credit, you can also get free copies of your credit report once a year from each of the main credit reporting agencies. Make sure to correct any discrepancies to ensure your report is an accurate reflection of your actual credit history. (FYI: Most agencies require you to pay a nominal fee if you wish to see the actual 3-digit credit score, but viewing your credit history is free.)
Is renting always cheaper than buying a home?
Not necessarily. When deciding whether to rent or buy, try and make sure to factor in how frequently you will want to move in the near future and whether you want to build equity in your home by purchasing.
Factors such as rent increases and property appreciation sometimes make purchasing a home the smarter move in the long run, especially combined with today's low-interest rates.
We hope this helped make the mortgage process a little easier to understand. If you still have questions, please give our office a call. Our qualified mortgage loan officers can help you determine your loan eligibility, based on your income and future financial goals.
Looking to Move?
If you are needing to relocate or move to a new home, contact me today for more information! If you're shopping or remodeling a home in Nevada, California, Colorado, Arizona or Texas, but are not sure where to begin, give me a call and get a free mortgage quote.
Our team's dedication to helping our clients prove how we stand out from our competition. Read our past client reviews and testimonials here.
I'm here to help- call me today!
Branch Manager & Residential Mortgage Loan Originator
2580 St. Rose Pkwy., Suite #230
Henderson, NV 89074
Office: (702) 420-2250
Fax: (855) 689-6691
Some products and services may not be available in all states. Programs, rates, terms, and conditions are subject to change without notice. Subject to verification of borrower qualifications, property evaluations and credit approval. Terms and conditions apply. This is not a commitment to lend and not all borrowers will qualify. Sierra Pacific Mortgage Company, Inc. may not be the lender for all products offered. Some loans may be made by a lender with whom Sierra Pacific Mortgage has a business relationship. Sierra Pacific Mortgage Company, Inc. NMLS #1788 and 988320. Nevada Commissioner of Mortgage License #3268, dba Sierra Pacific Mortgage Services, Inc. Not Licensed in New York. Texas License # 1788 and 11060-48154. Additional license info available at: www.nmlsconsumeraccess.org. Equal Housing Lender.