Typically the answer is yes. If you are making an offer on a home the majority of the time a formal approval from your lending institution is required. In addition, individual sellers will look at your offer with more validity if they see an approval letter. The initial approval is an evaluation of your credit worthiness while reviewing your income, assets, and debts.
Yes, in fact, applying for a mortgage loan before you find a home may be the best thing you can do. This will help you find out the maximum loan amount you qualify and thus, the type of price you should look for in a home. When you find a perfect home, you’ll simply call your Loan Officer to complete your application. You’ll have an opportunity to lock in your rate then and your lending institution will complete the processing at your request.
Your interest rate is the monthly cost you pay on the unpaid balance of your home loan. An Annual Percentage Rate (APR) includes both your interest rate and any additional cost or prepaid finance charges such as the origination fee, points, private mortgage insurance, underwriting and processing fees (Your actual fees may not include all of the items above).

While your interest rate is the rate at which you will make your monthly mortgage payments, the APR is a universal measurement that can assist you in comparing the cost of mortgage loans offered by different mortgage lenders.

Today, a 640 credit score is typically the minimum FICO score required for most programs on conventional, FHA and VA loans. However, there are many factors to consider in determining which loan program is best for you. There are additional programs for borrowers with lower FICO scores, but they usually are provided at higher interest rates due to the increased risk.
Yes. Keep in mind that lenders don’t just look at your past history, but also at your ability and willingness to pay in the future. At Casas Loans, we may be able to help you buy a home even if your credit is not perfect.
Having credit problems doesn’t automatically mean you can’t become a homeowner. Our preferred lender, Casas Loans, can answer your questions and tell you about special loans for borrowers with credit challenges. You can contact Casas Loans by calling 619-270-8500.
Even though the average number of days from application to approval will vary from lender to lender, the typical turnaround time is 7-10 business days.
The answer to this has a lot to do with your income and the amount of your debt load. As a rough rule of thumb, most home buyers purchase homes that cost between 1 1/2 and 2 1/2 times their annual income. For example, a home buyer earning $40,000 per year would buy a home costing between $ 60,000 and $ 100,000. There is, however, a degree of variation due to the individual market prices of the area in which you are interested in. In some areas, there may not be homes available within that range, so you may need to spend a bit more.

In general, your monthly mortgage payment (including taxes and insurance) cannot exceed approximately 28%-29% of your gross monthly income. Your total debt payments (car payments, credit card payments, etc. plus your monthly mortgage payment) cannot exceed approximately 36%-40% of your gross monthly income. These ratios will depend on the type of mortgage for which you are applying.

There is no set amount. In fact, you might be surprised to learn that many first-time homebuyer programs require as little as 3.5% down. Today, there are many loan programs that can be tailored to fit your needs and financial resources. Keep in mind that for down payments of less that 20%, private mortgage insurance (PMI) is usually required.
The loan-to-value ratio or “LTV” shows how much equity you have in your home. Equity is the difference between how much your home is worth and how much you owe on it. For instance, if your home is worth $300,000 and you owe $210,000 on your mortgage, you have $90,000 worth of equity in your home. To calculate your LTV, divide your current loan amount by your home’s value. In our example, your LTV would be 70%. In the world of lending, higher loan-to-value (or lower equity) means there is a greater risk the borrower may default on the loan. Therefore, the LTV is an important determinant in your qualification for home loans and rates. Most lenders offer lower rates when borrowers place more equity in their homes and lower the LTV on their loans.
Private mortgage insurance (PMI) is insurance written by a private company that protects the lender from losses in the event the borrower defaults on the mortgage. If you make a down payment of less than 20%, even if you have a good credit profile, lenders generally require private mortgage insurance. Borrowers are required to pay the premium for private mortgage insurance. Private mortgage insurance limits a lender’s exposure to financial loss resulting from loan default.
There are literally hundreds of different programs available, depending on your location (city, state, or province) and the mortgage source that you use. The requirements and benefits vary greatly from program to program.
If you plan to be in your home for more than seven years, you may want to consider a fixed rate mortgage, which offers predictable payments and long-term protection against rising mortgage interest rates. If you plan to be in your home for less than seven years, an adjustable rate mortgage could be attractive. Keep in mind that with an adjustable rate mortgage, your monthly payments have the potential to go up each time your interest rate adjusts.

Closing costs can be divided into 3 main categories:

  1. Lender fees. Fees paid to the lender for the processing of your loan, such as discount points and origination and application fees.
  2. Third-party fees. Fees paid for services rendered by parties other than the lender, such as title insurance, flood certification and recording fees.
  3. Prepaid costs. Costs that are collected at the time of closing for items such as prepaid or per diem interest, property taxes and hazard insurance.

You will be provided with an estimate of your closing costs soon after your application has been received. These estimates will change if your loan program or loan amount changes.

There is always someone available at Casas Loans – our preferred lender – that would be more than happy to answer any questions you may have. Please call: 619-270-8500 or email your questions to info@casasloans.com

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