Frequently Asked Questions When Applying for a Mortgage (Pt. 7)

Robins Financial Credit Union is dedicated to our mission to be Member Focused, Financial Partners, Community Proud. We empower our members with the financial knowledge and resources they need to make informed decisions and achieve their financial goals.

Applying for a mortgage can see like a daunting process, especially if you're not sure where to begin. As your trusted financial partner, we're here to simplify the journey. We know our members often have questions about the requirements, the steps involved, and how to set themselves up for success - and we're here to help.

In this article, we will dive into the answers to some of the most frequently asked questions with Mortgage Loan Originator, Rebecca Webb. Whether you're a first-time homebuyer or just looking to refresh your knowledge, this guide will give you the clarity and confidence you need to start your homeownership journey. Let us help you clear up the confusion and get one step closer to making your dream home a reality.

Q: what is a down payment and how much do I need?

Rebecca: A down payment is the portion of the home's purchase price that you pay upfront, out of pocket, rather than financing through your mortgage loan. It represents your initial equity in the home and shows lenders you're financially invested in the purchase.

The amount you need depends on your financial situation and the type of loan you're applying for. If you're a first-time homebuyer, you may qualify for programs that allow for as little as 3% down. For repeat homebuyers, the minimum is typically 5%. However, depending on your credit, loan type, and the property's price, you may be required to put down a higher amount to meet lending requirements.

Keep in mind: a larger down payment can reduce your monthly mortgage payment and potentially help you avoid paying private mortgage insurance (PMI). 

Read our blog to learn how to save for a down payment on a home.

Q: what are closing costs and how much should I expect to pay?

Rebecca: Closing costs are the various fees and expenses you'll pay to finalize your home purchase. These costs cover a range of services, including:

• Attorney fees
• Loan origination fees
• Title insurance
• Appraisal and inspection fees
• Escrow deposits for property taxes and homeowners insurance
• Recording fees and taxes

Typically, closing costs range from 2% to 5% of the home's purchase price. For example, on a $250,000 home, you might expect to pay between $5,000 and $12,500 in closing costs. Your mortgage team at Robins Financial will provide you with a loan estimate early in the process so  you can understand and plan for these expenses ahead of time.

Q: Can I get a mortgage if I have a history of bankruptcy or foreclosure?

Rebecca: Yes, it's possible to qualify for a mortgage even if you've experienced bankruptcy or foreclosure in the past. However, there are mandatory waiting periods after these events before you can apply for a new home loan.

• For Chapter 7 bankruptcy, the typical waiting period is 2 to 40 years, depending on the loan program.
• For Chapter 13 bankruptcy, you may be eligible sooner, especially if you've made on-time payments under a court-approved plan.
• After foreclosure, the waiting period is usually 3 to 7 years.

Q: What is a mortgage closer?

Rebecca: A Mortgage Closer plays a key role in the final step of the homebuying process. This professional is part of our mortgage lending team at Robins Financial and is responsible for ensuring all the necessary paperwork is accurate, complete, and in compliance with lending and legal standards.

You Mortgage Closer will:

• Coordinate with the closing attorney or title company
• Prepare and review all closing documents
• Confirm the final terms of your loan
• Ensure funds are disbursed correctly on closing day

Essentially, they help tie everything together to make sure your home purchase is legally sound and successfully finalized. Think of your Mortgage Closer as your behind-the-scenes expert who helps make the keys to your new home a reality.

Read our blog to learn what to expect at your mortgage closing.

next steps

Applying for a mortgage doesn't have to be overwhelming. With the right guidance and answers to your questions, you can approach the process with clarity and confidence. At Robins Financial Credit Union, we are committed to supporting you every step of the way.

• Visit our Knowledge Center to find more informational blogs about the home buying process, various mortgage loans, and what to expect at your mortgage closing.
• Tune into our YouTube channel to watch our Buying a Home series.

If you need assistance or have additional questions about applying for a mortgage loan, make an appointment to speak to one of our Mortgage Specialists today!

Read our other blog articles to help you gain the financial knowledge you need to succeed.

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