HOT PROPERTY: ASK THE EXPERTS
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COMMON QUESTIONS ABOUT MORTGAGES
Navigating
the homebuying journey can be intimidating,
so we’re answering the most common questions to give you a head start.
1. Do Ineed to getprequalified foramortgage? It’snot necessarybut by getting prequalified, you’ll find outhow much youcan comfortablyafford, and it maygiveyou an edgeover other buyers.
2. Howmuch mortgagecan Iafford? Consider howmuch youmake, your monthly expenses,how much moneyyou have saved, howmuch youcan put towardsadown payment, current interestrates and current home values.Reviewyour budget so youcan seehow much youbring in versus howmuch youspend each month.
3. What arethe current mortgagerates? Mortgageinterestrates arealwayschanging, so it’s important to check current rates and see what youqualify for.It’salsoagood ideatoget prequalified and lock in that rate so youwon’t be impacted if rates go up.
4. What is adebt-to-income ratio? Your debt-to-income ratio compares your gross monthlyincomewith howmuch you
oweeachmonth. To getthisratio,divide your monthlyexpenses by your gross monthly income. This number turns into apercentageand becomes your debt-to-income ratio.
Lenders typicallywant the number to be below43%.
5. What credit scoredoIneed? Lenders useyour credit score to determine risk. While higher credit scoresusually mean better rates,you maystill qualify for amortgageevenifyour score is less than perfect.
6. What is adownpayment? When purchasing ahomeand getting a loan, the down payment is the moneyyou payupfront.Thisamount goes toward the totalprincipal which lowers the amount of your mortgage.
7. Howmuch of adownpayment do Ineed? Down payment amounts vary depending on the type of loan. With aconventional loan, the down payment is 20%. Youcan put less down, but you mustpay private mortgageinsurance(PMI).
8. What is private mortgageinsurance(PMI)? PMI covers the lender if youstop paying your mortgageand defaultonyour conventional loan. TheyearlycostofPMI is about 1% of your outstanding loan balanceand is added to your monthlymortgagepayment.
9. What arethe documents needed to apply for amortgage? Lenders requireseveral documents when applying for amortgage. Have your paystubs, W-2s,tax returns,bank statements,investment account statements and brokerage account information ready.
10.What types of mortgages areavailable? The twomostcommon types arefixed-rate and adjustable-rate mortgages.With afixedrate, you’ll always knowwhatyour monthly principal and interestpayments will be. Adjustable-rate mortgages (ARMs) offer lower earlypayments than afixed-rate, then change when your rate adjusts.
11. What is an FHA mortgage? An FHA (Federal Housing Administration) mortgageisaloaninsured by the government. FHA mortgages offer down payments as lowas 3.5%, but theydorequiremortgageinsurance.
12. What is aVAloan? If you’re aveteran or active-duty servicemember,oramember of the GuardorReserve, youmay be eligible for aVAloan, which haslow or no down payment options available and doesn’thave amortgageinsurance requirement.
13.How fastcan Iget amortgage? It typicallytakes 30 to 60 days to geta mortgage. Having all your documents and information readyand working closelywitha mortgagelender will help move things along morequickly.
14.What arethe tax benefits of amortgage? Theremay be tax benefits associated with owning ahome, such as deductions for mortgageinterestpayments,realestate taxes and mortgagepoints.Check with your tax advisor for afull listofdeductions.
Getting amortgagedoesn’thave to be scary.
By doing your research and working with your lender,you’ll be in your newhomeinnotime.
Visit latimes.com/chasemortgage to learn more.
These articles are foreducational purposes only and provide generalmortgageinformation.Products, services, processesand lending criteria describedinthesearticles may differ from those available through JPMorgan ChaseBank N.A. or anyofits affiliates. Formore information onavailable products and services,and to discuss your options, please contact aChase Home Lending Advisor.
All home lendingproducts are subject to credit and property approval. Rates, program terms and conditions aresubject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply. Home lendingproducts offered by JPMorganChase Bank, N.A. ©2021 JPMorgan Chase &Co.
