Navigate your Mortgage Options: What You Should Know

Welcome to Table Talks, where I answer your questions about real estate subjects with tips and ideas surrounding your concerns. I'm Carla Knight, a realtor with Coldwell Banker Realty, nestled in the wonderful communities of Metro Denver's west side.

CONSIDERING A MOVE? HERE'S WHAT YOU NEED TO KNOW. 

Starting your home buying journey is filled with questions. If you’re ready to start on your highway to homeownership, you should be gearing up to hire a mortgage professional, it’s important to treat it like what it is: hiring a trusted guide to help you navigate this life-changing milestone. This blog will cover everything from necessary documents to understanding different loan types, helping you organize your finances efficiently helping you  make informed decisions.

ESSENTIAL DOCUMENTS FOR YOUR LENDER

Before diving into various loan options, gathering your financial papers is a must. Here's your checklist:

 * Three months of bank statements: Copy all pages, even the blank ones. Missing pages could raise unwanted questions.

 * Paystubs: Whether you’re paid monthly, bi-monthly, or weekly, a month’s worth of paystubs is a good starting point.

 * Investment and income documents: This includes any documentation of other income like child support, divorce decrees, insurance policies, or annuities.

 * Tax returns: Provide two years of returns. It proves your consistency in income, which lenders find crucial.

 * Debt statements: Statements for monthly payments on car loans or credit cards for at least a month.

Addressing your assets and liabilities early can streamline your loan approval process. The lower the debt to income ratio, the more available cash there is for a higher monthly house payment.

TYPES OF LOANS AND TERMS EXPLAINED

Once your documents are in order, it’s time to discuss loan types and terms with your lender.

LOAN TERMS

The term is the length of the repayment process:

*15, 20, or 30 years are common options. Most home mortgages are 30 years, but few last the entire term.

INTEREST RATES

Interest rates can be structured in several ways:

 * Fixed Interest Rate: Traditional for a 30-year term, this remains the same throughout the loan.

 * Adjustable Rates (ARMs): These start low but fluctuate over the term of the loan. Understand potential payment fluctuations before choosing this option.

UNDERSTANDING DIFFERENT LOAN TYPES

Here’s an overview of the main loan types available:

 * FHA Loans: Partially insured by the Federal Housing Administration, requiring as little as 3.5% of the purchase price as a down payment.

 * Conventional Loans: Not guaranteed or insured, often provided by private institutions. These can have varied down payment percentages from as low as 3.5% to 10% or more. 

 * VA Loans: Ideal for veterans and can be very friendly in terms.

No matter the loan type, always pay attention to the interest rate and terms presented to you. Remember the budget number the lender gives you is the top budget you qualify for. It does not mean you have to go to that limit for your purchase. 

There’s much to learn about the mortgage process, and asking questions is key. To ensure you’re making the best decisions, reach out for my exclusive lender interview sheet. Stay informed and follow me on YouTube, Facebook, or Instagram for the most current information available.

Contact me today to start your journey to homeownership! Give me a call at 720-626-9747. Have a great day, and I hope to hear from you soon.

Mastering the home buying journey can seem daunting, but with the right knowledge and preparation, you'll be well-equipped to find the perfect home. If you have more questions, contact me through social media, LinkedIn, or my website. Let's make your home buying process as seamless as possible together!