First Time Home Buyer? Accurate Mortgage Group Can Help!
A Nashville mortgage lender with years in the business, Accurate Mortgage Group helps you save money when house hunting. Check out some of these frequently asked questions we hear from people looking for their first home.
How much is a down payment?
Down payment requirements depend mostly on the loan program and the price of the property you want to buy. The size of your monthly mortgage payment will also go up or down depending on your down payment. A good rule of thumb: the less money you put down on a home at closing, the more you’ll pay in interest in the long run.
The interest rate on a loan is closely connected to your credit score. The recommended minimum credit score for applying for a mortgage loan is 620. The average down payment is about 6% of the loan’s value. First time homebuyers will usually have lower down payment requirements if they qualify. However, it’s possible to buy a home with as little as 3% down depending on your loan type and income.
What are closing costs?
Throughout the course of a home purchase, numerous third parties (for example, your real estate agent and mortgage lender) render services. They must receive payment before the transaction is finalized. That’s where closing costs come in.
Home buyers and sellers may need to pay closing cost fees. Closing costs may include fees for underwriting, commissions, taxes, title and record filing, and insurance premiums, just to name a few possibilities. The majority of these closing costs derive from third-parties and are based on the purchase price and the county the home is located in, and will be the same no matter which lender is used. Within three days of receiving your mortgage application, lenders are required by law to provide you with a loan estimate document which also estimates the closing costs. For closing cost assistance, look into your state’s HFA (housing finance authority.)
How do VA loans work?
If you’ve served in the military, you may be eligible for a VA loan. VA loans differ from conventional mortgages because they are partially backed by the Department of Veterans Affairs. This guarantee often results in private lenders giving home buyers better rates and terms, however the financing options are set by the VA. If you are considered 10% or more disabled by the VA, then the VA funding fee is waived. This one-time charge is an administrative fee that is rolled into the mortgage. Another benefit of VA loans is that they can go up to 100% of the purchase price and never have mortgage insurance (PMI).
If you already have a VA home loan, you could get an interest Rate Reduction Refinance Loan (IRRRL) to reduce or stabilize your monthly payments.
What are FHA loans? How do they work?
The U.S. Federal Housing Administration is a government agency that provides financial assistance in the form of FHA loans. In the FHA loan program, you can qualify for a loan depending on your financial situation.
Here’s why FHA loans are especially popular for first-time homeowners:
- Easier to qualify for than conventional loans
- Lower down payment requirements
- Lower credit score requirements
FHA loan limits define how much you can borrow for a HUD-backed mortgage (U.S. Department of Housing and Urban Development). Each county has different limits. Your mortgage Loan Advisor can tell you what is available for your FHA home loan. Give us a call today to learn more.
What are USDA loans? How do they work?
A USDA loan features the lowest funding fee of all government loans and no down payment requirements. The U.S. Department of Agriculture (USDA) offers these loans to low- to moderate-income individuals living in small towns or rural areas near metro Nashville. For example, this includes areas such as Lebanon, parts of Mt. Juliet, Ashland City, Columbia and White House. The Rural Housing Service (RHS) allocates funds to qualified applicants looking to purchase modestly priced homes as their primary residence. Accurate Mortgage Group’s USDA loans terms are available for 30 years.
There are many different types of loans available for first time buyers. For more loan options and loan programs, reach out to the Mortgage Loan Advisors at Accurate Mortgage Group by calling (615) 709-5654.
Let Accurate Mortgage Group Lead the Way
If you need help navigating the home loan process, we’re here for you. Call or text (615) 709-5654 to explore your options and secure your dream home with guidance from Accurate Mortgage Group.