Congratulations! You've embarked on the exciting journey of becoming a homeowner. The open houses, the bidding wars (hopefully won!), the paint swatches – it's all exhilarating. But amidst the whirlwind, there's one aspect that can feel daunting: the mortgage. This guide will demystify the mortgage process and equip you some terminology to navigate it smoothly.

Mortgage 101:

• Types of Mortgages: Fixed-rate (interest rate stays the same for the loan term), adjustable-rate (interest rate fluctuates), FHA (government-backed for lower credit scores), VA  (for veterans), etc. There are many loan products, that is why it is important to have a knowledgeable Loan officer to guide your best interests.

• Down Payment: Aim for 20% to avoid private mortgage insurance (PMI), but even 3-5% is possible with certain loans. The higher the down payment, the lower your monthly payments. There are many loan products you could be eligible for without the 20% down. 

• Interest Rate: This directly affects your monthly payment. When you work with a mortgage broker, such as Traditional Mortgage, we do the shopping around for you to find the best loan to fit your financial situation.

• Closing Costs: These fees cover loan processing, appraisals, title insurance, etc. Factor      them into your budget; they can add up to 2-5% of the loan amount.

Tips for First-Time Homebuyers:

• Get pre-approved: Before you start house hunting, get pre-approved for a mortgage. This shows sellers you're a serious buyer and strengthens your offers.

• Boost your credit score: Even a few points can make a big difference in your interest rate. Pay off debts, stay on top of payments, and avoid unnecessary credit inquiries. We can give you some tips to help boost your credit score. 

• Understand the terms: Don't be afraid to ask questions! Don't sign anything you don't fully understand. Our mortgage professionals will answer any and all questions, we want you to be in control and understand everything from the very beginning.

• Consider down payment assistance: Depending on your income and location, there might be programs available to help with your down payment. Research and explore all options.

• Stay organized: Keep all your financial documents readily  available throughout the process. This will make things smoother for you and your lender.

Remember: The mortgage is a significant financial commitment, but it's also an investment in your future. By educating yourself and making informed decisions, you'll be well on your way to unlocking the door to your dream home.

Homeownership is a rewarding experience, and the mortgage, while initially complex, can be navigated with the right knowledge and support. So, take a deep breath, arm yourself with information, and get ready to turn the key to your own piece of the American dream!

Are you wondering what your buying power is? Fill out this application today and one of our mortgage professionals will help you find out!