Frequently Asked Questions
Although a lender looks at your flow of income when you buy a home, there is no set income required to purchase. However, it is important to consider if you qualify for a loan depending on your credit score, DTI ratio, and down payment. All of these combined indicate to lenders how likely you are to pay back the money you borrow.
No one type of mortgage loan is superior to another or right for everyone. Multiple programs and options may be appropriate for you, so it’s crucial to discuss what is a possibility with your mortgage lender.
Many different items are needed to prove you can afford the mortgage and have the means to pay it back. Prepare to gather as much of the following:
- Income verification such as your last two years' tax returns, pay stubs, W-2s, and 1099s
- Driver’s license and Social Security card (or alternative ID)
- Bank statements, retirement and investment accounts, or gift letter (if using gift funds)
The term “closing costs” refers to all the expenses the buyers must pay before their loan is completed. This includes a number of fees, such as appraisal origination, attorney, recording title fees, and more. The lender must provide the buyer with a Loan Estimate of closing costs, which can vary significantly. Expect to pay around two to three percent of the home’s price in closing costs.
Depending on your type of loan, it is possible that your monthly payments will change. Future rate adjustments will apply to you if your plan changes based on the market. Even with a fixed-rate loan, your total monthly payment can still change due to property taxes and insurance expenses.