What is a Pre-Qualification?
Pre-qualification is the process of determining whether a borrower has enough cash and sufficient income to be eligible for a certain size mortgage loan. Getting pre-qualified can help you decide how much home you can afford before you find your new place. A pre-qualification is subject to verification of the information provided by the applicant. Whether you are already pre-qualified or are just getting started, let Global Lending Corp. guide you home.
What is Private Mortgage Insurance?
Private Mortgage Insurance, also known as PMI, is a supplemental insurance policy you may be required to obtain in order to get a mortgage loan. PMI is provided by private (non-government) companies and is usually required when your loan-to-value ratio — the amount of your mortgage loan divided by the value of your home — is greater than 80 percent.
PMI isn't a bad thing — it allows you to make a lower down payment and still qualify for a mortgage loan. In fact without PMI, many of us would not be able to purchase our first home.
How is PMI calculated?
Your PMI premium is fixed based on plan type (loan-to-value ratio, loan type, loan term, etc.) and is not related to your particular credit history or other individual characteristics. PMI typically amounts to about one-half of one percent of your mortgage amount annually, according to the Mortgage Bankers Association, and the premium payment is usually rolled into your monthly mortgage payment. On a $200,000 mortgage, you may be paying $1,000 per year for PMI.
What is Homeowner's Insurance?
A homeowners insurance policy is a package policy that combines more than one type of insurance coverage in a single policy. There are four types of coverages that are contained in the homeowners policy: dwelling and personal property, personal liability, medical payments, and additional living expenses. Homeowner's insurance, as the name suggests, protects you from damage or loss to your home or the property in it.
Remember that flood insurance and earthquake damage are not covered by a standard homeowners policy. If you buy a house in a flood-prone area, you'll have to pay for a flood insurance policy that costs an average of $400 a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at www.fema.gov. A separate earthquake policy is available from most insurance companies. The cost of the coverage will depend on the likelihood of earthquakes in your area.
How do I know which program is right for me?
The first step in deciding which program is right for you is to take a realistic look at your individual situation. How much do you have for a down payment? How long do you plan on staying in the home before selling? Are you willing to pay points up front for a lower interest rate? Do you expect your annual income to increase in the near future or will it stay the same throughout your career? Does your income vary from month to month? How is your credit history? Are you purchasing an existing home from a seller?
We offer a variety of mortgage programs so you can be sure to find the program that best fits your needs.
Can I still buy a home even if my credit isn't perfect?
Unlike a traditional mortgage, which requires a good credit score to qualify, loans that are available to those with lower credit scores typically have higher mortgage rates. But if home ownership is your goal, it's definitely possible to achieve it with some concessions. If you're a first-time home buyer, there are programs designed to help you qualify for a loan. To start, it contact us to help you understand what you'll need to do to buy a house.
Additional questions?
In addition to getting in touch directly with your loan officer, you are always welcome to contact us at 305-250-2463 or email us at aberg@bergcapitalmortgage.com