The Answers To The Six the Most Frequently Asked Mortgage Questions

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As anyone in the Las Vegas area will tell you, I’ve been doing this for longer than most people can remember. And time and again, the most frequently asked questions have to do with mortgages and financing. So today, I met with Linda Bertuzzi of Nova Home Loans at 702-596-9565, a long-time partner and friend of the Mitch Schwartz real estate team and we share with you a three-part series with the answers to your questions.

What are the costs involved in making a home purchase?

There are lender fees and there are title, escrow, taxes and insurance fees. On average this adds up to about two to three percent of the sales price in terms of cash closing costs needed to close. Ideally, meeting with your lender in advance will give you a clear idea of your closing costs based on your price range, timing and other factors that are unique to you.

When Should I Set a Budget?

These days (especially with there being more buyers than there are homes for sale) it is strongly suggested to obtain a preapproval from your lender before venturing out to search for homes. Not only will you know what you qualify for in terms of your debt-to-income ratio and monthly payment but also you will be able to ascertain your expenses up front.

How Are Interest Rates These Days?

The most popular loan products these days are 15 and 30 year fixed rate loans but we are seeing a lot of lender competition. The Fed has kept the base rate low for at least a few more months, if not more, but no one can really tell when they will start to climb up again. For now, we are still enjoying all-time low interest rates. Depending on your credit and down payment investment, you may be able to secure a lower-than-average interest rate. This is just another reason to meet with a lender before starting your home search.

What Is the Minimum Credit Score I Need to Borrow Money for a House?

Though it’s fluctuated in the past, these days most lenders look for at least a score of 640. Once again, if you are making a significant down payment on the house, that number might be able to go a little lower. But lenders will no longer accept anything lower than 620 as used to be the case prior to the housing industry crash in 2007. Higher scores also translate to better interest rates so if there are two people looking to buy a home and one has a lower score – sometimes it might make sense to remove the lower score from the loan application.

What If My Credit Is Not Perfect?

Many times people will make the decision to buy a house but they have no idea of the condition their credit is in. It is critical to know in advance of starting your home search if there are any concerns that need to be rectified. If you do need help with rebuilding your credit, lenders will share with you specific steps on how to rectify concerns that could later impact your ability to borrow. Sometimes, Linda’s team has helped clients build their score higher to get a better interest rate.

How Should I Choose a Good Lender?

While all lenders will be working from the same investor pools, and therefore will likely offer similar interest rates, the challenge comes with unscrupulous loan officers that charge extra fees then call them discount points. You should choose a lender based on customer service levels, your connection with them, long-standing relationships you may have with them and by reference of your Realtor®.