Engel Volkers Buyer & Seller Guide Bozeman - Manual / Resource - Page 52
E n g E l & Vö l k E r s | B oz E M a n
Common mortgage questions
Thinking of buying a new home?
We've got the answers to the questions everyone asks about mortgages.
Am I better o昀昀 renting or buying a home?
How much do I need for a down payment?
the decision to rent or buy a home differs for everyone, as
there can be benefits to both, depending on how long you
plan to live in your home. we can help you weigh the pros
and cons to see which option is best for you. if you decide
buying a home is in your future, we have amazing lender
connections throughout the area to refer you to.
Your down payment requirements will depend on your
lender, the type of home loan you choose, and the type of
property you are buying. Your required down payment can
range anywhere from 0-20% of the home’s purchase price.
Lenders offer a variety of different loan programs and each
program has different rules regarding the down payment
required.
What are the advantages of a home purchase?
The american Dream, right?! Buying a home gives you a
sense of investing in a community you love and pride for
achieving home ownership. additionally, financial benefits
come into play such as tax savings, building home equity
and no longer paying rent to someone else. interest rates
are still at record lows and with many unique down-payment
options available, a home purchase may be easier than you
think!
What’s my 昀椀rst step?
The Mortgage Pre-approval. Unless you are paying cash,
you will need to get a mortgage. In order to know how much
home you can afford, you will need to get pre-approved for
a loan. ask for recommendations, and meet with a lender to
get the process started.
How much can I a昀昀ord to borrow?
everyone’s financial situation differs and it’s important to
recognize what you can comfortably afford to borrow. Your
loan officer will help you determine this while [in general]
factoring in:
• Your debt-to-income ratio (this is your total monthly
payments as a percentage of your gross monthly
income).
• the amount of cash you have available for a down
payment and closing costs.
• Your credit history.
• the value of the property you want to purchase.
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How long does it take to buy a home?
with newer guidelines designed to simplify and consolidate
some of the required loan disclosures, it changes the timing
of some activities in the mortgage process. Thirty to 45
days is the new normal but each situation is different.
What other fees can I expect, besides down
payment?
mainly loan origination and the cost to close. the down
payment is usually the largest cost associated with buying a
house. Lending fees are the second largest costs to
homebuyers. Most lenders will charge between 2% to 4% of
the loan amount for loan origination fees, depending on the
loan type. conventional loans usually have lower loan
origination fees, but require more money down. Your loan
officer will be able to help you determine how much you can
expect to pay towards loan origination and closing costs.
What are the closing costs?
closing costs include items such as appraisal fees, title
insurance fees, attorney fees, pre-paid interest, and
documentation fees. these items are different for each
customer due to differences in the type of mortgage and
the property location, etc. You will receive an estimate of
your closing costs in advance of your closing date.
