May 2, 2023
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Do student loans and medical debt prevent you from buying a home?
Student loans and medical debt don’t automatically exclude you for a loan. Lenders look at monthly debt-to-income ratio and as long as monthly payments compared to income are within required limits, you may qualify for a loan.
Is a 740 credit score required?
Having at least a 740 credit score can give you the best interest rate but it isn’t a required credit score to qualify for a loan. Lower credit scores can adjust your interest but you can still qualify for a home loan. You can access one free credit report annually.
Is 20% down the required down payment?
The minimum down payment to purchase a home can be as low as 3%. There are also income-based grants that can be used toward a down payment. Any down payment under
20% of the purchase price will require private mortgage insurance. The cost of private mortgage insurance
varies but your lender should be able to answer any private mortgage insurance questions.
Should you find a home before applying for a loan?
It is recommended that you speak with a mortgage lender before you start house hunting. Without knowing what amount you qualify for, you could be locked out
of your dream house. Working with a local lender gives you the opportunity to discuss loan options and monthly payment, plus they can give you a pre-qualification letter that can be shared with your realtor to put your offer at the top of the list.
Is the lowest interest rate always the best option?
Just because the interest rate sounds
lower than competitors’ doesn’t mean it is better. The best way to ensure you’re getting the best rate is to compare APR or ask about closing costs and rate buy-downs or points. Some lenders automatically charge points, which make
their rate seem lower but in the end you are paying for the lower rate.
Are all lenders the same?
All lenders are not the same. You want to make sure that you are working with someone you trust and who has your best interest in mind. A lender who is prompt at responding to your
requests and is willing to answer questions can put you at ease.