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FAQs – First Time Home Buyers
HOW DOES MY INCOME AFFECT MY ABILITY TO GET A MORTGAGE?
Most lenders use a ratio of about 30% of your gross income to determine the amount of your monthly housing payment. Your payment will not only include the principal and interest but also your taxes and insurances, in most cases. The amount of your monthly payment will be used to help determine your loan amount.
HOW DOES MY CREDIT SCORE AFFECT MY ABILITY TO GET A LOAN?
Lenders look carefully at your credit scores, payment history, and amount of monthly debt in determining whether you qualify for a loan. Most conventional loan products require a minimum credit score of 640.
HOW MUCH CASH WILL I NEED FOR DOWN PAYMENT AND CLOSING COSTS?
These amounts will vary depending on the type of home you purchase, the mortgage product you use, and the lender you choose. Most require a minimum of 1%-3% of the home price as a down payment. Closing costs can vary but average between $5,000-$8,000.
HOW DO I KNOW WHETHER MY MORTGAGE IS AFFORDABLE?
By national standards, an affordable payment is approximately 30% of your gross monthly income. Remember, this includes your taxes and insurance. This percentage may be reduced if your monthly credit debts are high.
HOW DO I KNOW WHETHER I QUALIFY FOR THE FIRST HOME CLUB OR OTHER GRANTS TO ASSIST ME IN MY PURCHASE?
At the time of your mortgage readiness assessment, your counselor will review all available program options with you.