Here are 5 typical questions asked by homebuyers about getting their first mortgage loan.
How much do I need to save up for a down payment?
A conventional loan down payment is usually 20% of the sales price, but other types of financing require as little as 3.5% to 15%. A mortgage lender can tell you what types of loans you qualify for.
How do I know if I qualify for a loan and how much I can afford?
Contact a mortgage lender to get pre-approval for a loan. The lender will ask you some basic questions about your income and debts and can tell you what amount you can be approved for, and how much your mortgage payments will be. Ask me for my lender recommendations!
What does the lender need from me to give me a loan?
Usually, you are asked to provide your last two tax returns to show proof of income. You should also provide recent bank and credit card statements and proof of your current pay rate. You will also be asked for your social security number so they can run a credit check.
The lender may want to meet with you before asking for this documentation, or they may provide you with a list of which documents you need on your first appointment.
What’s the difference between pre-approved and pre-qualified?
While often used interchangeably, these terms don’t mean the same thing. Pre-qualification is an estimate of what you may be approved for based only on the verbal information you provide. Pre-approval means the lender has verified your income and debt information and run a credit check.
Also, read “Pre-Qualified vs Pre-Approved” for more details about the difference between pre-approved and pre-qualified.
How do I know which mortgage option is right for me?
Your mortgage lender is the best person to advise you on this question. Their products and qualifications change from time to time, so they would know best what products are available to meet your needs.
That said, you can always ask me, if you want a second opinion. I began my career in real estate as a mortgage lender.