|
Q: |
If
my credit record is less than excellent, can I still
buy a home? |
| |
|
|
A: |
Yes. Your credit does not have to be perfect to
purchase a home. Lenders rate loan applicants by
their credit risk. Borrowers are rated from A to
E, with A Borrowers being the best credit risks.
The better your rating , the better the loan terms a
lender will offer you.
Small financial slip-ups such as being late on a
mortgage payment in the past year, can move you from
an A to a B list. If your credit rating is less
than an A, your best bet for getting a mortgage is to
by pass the banks altogether and head straight to the
mortgage broker specializing in difficult loans.
|
|
|
Q: |
What is required for a loan pre-approval? |
| |
|
|
A: |
Submit a loan application and all the supporting
financing documentation, including a credit check and
employment verification. You will then be
approved for a mortgage, subject to a satisfactory
property appraisal and title review. |
|
|
Q: |
How long will a bankruptcy show up on a credit report? |
| |
|
|
A: |
A
bankruptcy can stay on your credit record for up to 10
years and severely limiting your ability to borrow.
A lender may require you to have a more substantial
down payment, for example or change a higher interest
rate because you are a great risk. |
|
|
Q: |
Who pays closing costs? |
| |
|
|
A: |
Buyers and sellers pay closing costs. Who pays which
costs can be negotiated. In general, sellers pay
for real estate commission on the sale and any costs
relating to paying off the financing on the house,
while buyers pay for the costs of actually
transferring the property and the financing. You
should budget about 5% of the purchase price for
closing cost. |
|
|
Q: |
How should I evaluate an adjustable rate mortgage
(ARM)? |
| |
|
|
A: |
When considering an adjustable rate mortgage (ARM)
always look at the worse case scenario. How long
will the initial interest rate remain in effect and
what will the interest rate be after the first
adjustment? How high can the interest rate be if rates
continue to rise? How long will it take for the
rate on the ARM to reach the maximum allowed under the
loan program? If these numbers do not match your
budget, you may want to buy a cheaper house or wait to
accumulate more funds to quality for a fixed rate
loan. |
| |
|
| |
|
