What Questions Should A Renter Ask When Applying For A Mortgage?
Are you currently renting your residence, and finally ready to take the next step and become a homeowner? If so, you may be increasingly aware of the complexities of financing a home, and have several questions regarding the process. If you are located in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and are interested in financing a property, Foundation Mortgage is here to help. Continue reading to learn more about the types of questions a renter should ask when applying for a mortgage.
1. What Types Of Documentation Will I Need To Provide When Applying For A Mortgage?
When you apply for a mortgage, you will want to prepare the necessary paperwork that will be needed for loan approval. Typically, the documentation that is required will be documentation of debt, such as student loans, vehicle loans, and credit cards. You will also need to provide income and employment verification, tax and credit history documentation, and statements of any additional assets.
2. How Will My Credit Score Affect My Interest Rate?
Your credit score has a significant impact on the interest rate that you will be able to get on a mortgage.
Credit scores are based on a number range of 300 to 850, and the higher your credit score is, the better interest rate you can get because it demonstrates to lenders that you are more likely to pay back the loan. Additionally, if you have a higher credit rating, your down payment amount could be reduced.
3. How Long Does The Application Process Take?
In order to obtain a mortgage, a borrower must submit a completed loan application and the necessary documentation. From the time of the application to the closing of the home, obtaining a mortgage generally takes between 30 and 60 days, depending on the distinctive factors of each transaction.
4. Are HOA Insurance Fees And Property Taxes Included In My Mortgage Payment?
HOA fees help cover the expense of certain services and the upkeep and maintenance expenses of common areas of your property, and are typically an external expense that isn’t included in your mortgage payment. If you are a homeowner, you will be required to pay property taxes, which usually can be rolled into your monthly mortgage payment.
5. How Can I Lock In An Interest Rate For And How Long?
When you have been approved for a loan and are satisfied with your interest rate, you are ready to lock in your rate and wait for your closing date. Locking in a mortgage rate helps keep your rate from increasing from the time you apply to the closing date. The amount of time a mortgage rate will remain locked will vary depending on your loan, its terms, and the location you live, but generally last between 15 to 60 days.
6. How Much Funding Will I Need For Closing Costs?
Closing costs cover the processing expenses associated with finalizing a mortgage transaction and include such items as a home appraisal, searching the home’s title, and creating the loan. It is important to note that closing costs can cost approximately 3 to 6 percent of the total loan amount.
If you are looking for a home in Knoxville, Maryville, Lenoir City, or Oak Ridge, Tennessee, contact Foundation Mortgage today for a consultation.