After I have decided on a property to buy, is it possible for me to change my mind about applying for a mortgage?

Yes. The mortgage process begins with a pre-qualification letter, and you can still change your mind until you apply for a mortgage.

How much can I afford to pay for a home?

Different lenders will have different guidelines when it comes to affordability. Generally someone can afford a monthly payment that is 28% of your gross income. For example, if you earn $50,000 then you can afford a monthly mortgage payment of around $1400.

My credit score isn't very good. Will I still qualify for a mortgage?

Yes. Just because your credit score isn't very good, it doesn't mean that you won't be able to qualify for a mortgage. You just need to shop around and try to find the best lender who is willing to work with you.

Will I be obligated to purchase mortgage insurance (PMI)?

If your down payment is less than 20% of the purchase price of the home, then you will be obligated to purchase mortgage insurance. This is usually paid by lenders and covers them in case you default on your loan.

Can I get a mortgage if I don't plan on staying in the home for more than five years?

Yes you can although you need to confirm there are no penalties for paying off the mortgage before the end of the term.

Does it make financial sense to stay in a home for less than 5 years?

The first few years of a mortgage term typically consistent of interest payments, which do not help build equity. So depending on the situation it may not make sense. If the house is going to increase in substantial value over those five years then it may make sense to purchase with the intent of leaving in five years.

Can I get a construction loan?

Just like a traditional mortgage, there are several factors that determine where you can get a construction loan. A construction loans is a mortgage that is taken out during the construction period of a home. A separate loan is taken out for the actual purchase of the property. Once the home is finished, the original loan will be paid off and you can begin making monthly payments to the construction bank.

What information do I need to provide to get preapproved for a mortgage?

You will need to provide information such as your current employment, income, credit score, and the amount of money you have committed to the down payment. Some lenders may have slightly different requirements, but the information should be enough to get you a decision on preapproval of a mortgage loan.

• 2 years of the most recent Tax returns and W-2 forms.
• 2 months of most recent bank/asset statements.
• Paystubs from the last 30 days.
• Valid photo ID.

Is there any obligation to work with the lender after they provide my preapproval?

No, there is zero obligation to do business with that lender, however you will need to go through the approval process if you decide to work with another lender.

How Long Can a Mortgage Term Be?

A mortgage term can be anywhere from 10 to 40 years. But most home buyers opt for a 15- or 30-year term. During these terms, you are required to make monthly mortgage payments. These are sometimes more affordable.

Is there a better time of the year to purchase a home?

Yes, there is. January is typically the best time to purchase a home. You will be competing with the fewest amount of people at these times, so it will be easier to get your offer on a home accepted.

What is a cash out refinance?

A cash out refinance is when you are refinancing your mortgage loan in order to get some of the equity that you have built with no appraisal required.

What are the reasons someone does a mortgage refinance?

• Lower your interest rate (Save $$$ each month)
• Reduce your monthly payment (Save $$$ each month)
• Pay off your home early
• Change from an adjustable-rate mortgage (ARM) to a fixed rate mortgage
• Need to cover some immediate need like major home improvements

How do I know which mortgage to get?

A mortgage professional can review your current situation and help you decide the best type of mortgage for you. People tend to go with fixed rate mortgages because of their stability, but adjustable-rate mortgages may offer a lower interest rate which can save you money. Speaking with a mortgage professional will help you determine the best course of action.

Mortgages can be confusing for consumers, but that doesn't mean they have to be. This article provides answers to some common mortgage-related questions that consumers may have. It is important for consumers to do their research and understand the different types of mortgages available to them. Speaking with a mortgage professional can also help make the process easier.