If you're in the market for a new home, you're probably also in need of a mortgage. There are so many types of home loans, it can be hard to know where to start. Fixed-rate or variable rate? Conventional or not? What on earth is a jumbo loan?
Conventional loans are accessible for many homebuyers but often have stricter down payment and credit requirements than government-backed loans.
When you’re ready to purchase a home, it’s easy to get stuck when it comes to deciding the right mortgage for your needs. With so many options out there, it’s hard to tell which is the best one for you.
If you are a first-time homebuyer or have a lower income, you may wonder what programs are available to help you achieve homeownership. Fortunately, agencies like Freddie Mac and Fannie Mae have developed programs specifically for this purpose.
For many years, first-time homebuyers and other borrowers have turned to Federal Housing Administration (FHA) loans to finance their home purchases. There are many reasons why these government-backed loans are so popular. It's often easier to qualify for an FHA loan than a conventional loan, and the down payment requirements are typically significantly lower.
Don’t worry if you’ve never heard of a debt-to-income ratio before. Most people don’t learn about DTI until they’re preparing to get a loan for something like a car or home.
It’s important to be aware of lender debt-to-income requirements when applying for an FHA loan to increase the chance of loan approval. In addition, it is highly recommended to calculate your DTI ratio to see where you stand.
Prequalification and preapproval are sometimes used interchangeably, but there is a slight difference between the two during the mortgage process.
To get approved for an FHA loan, lenders will look at a borrower’s previous and current employment for the past two years to ensure they have a steady income to repay the loan. It’s important to understand these guidelines and be prepared when applying for an FHA loan.
