What are the Most Common Mortgage Questions Asked?

Getting a mortgage is exciting, but also quite scary. Many new homeowners have questions about the mortgage they are getting. Here are some of the most commonly asked mortgage questions from new homeowners.

How much of a mortgage will I be able to get?

The amount of the mortgage you will be able to take out depends on your gross monthly income, your credit and a few other factors. Often, it will be give you a monthly payment of no more than 32% of your gross monthly income.

How big will my down payment need to be?

If you don't want to pay mortgage default insurance, you will need a down payment of at least 20% of the value of the home. However, if you don't mind paying for mortgage default insurance, you can put about 5% down to purchase a new home.

What type of things do lenders look at to qualify me for a mortgage?

The main factors lenders will look at include your credit history, income, employment history, debts and the value of the property. All of these factors are used to help qualify you and credit may be the most important one. If you have great credit, the other qualifications may not be weighted quite as much compared to someone with lesser credit.

How much are closing costs?

Many first-time home buyers forget about closings costs. It's important to make sure you prepare for these and expect closing costs to be about 1.5% of the purchase price of the home.

Is a fixed or variable rate mortgage the right choice for me?

Every situation is a bit different. A fixed rate is perfect for first-time buyers because the payment won't change, which makes it very easy to budget. However, for some buyers, a variable rate makes more sense, if they can handle the change in payment or they don't plan to stay in the home for more than a few years.

There are many questions to ask about mortgages. It's always best to get answer from a qualified mortgage lender and make sure you ask all of your questions before signing any paperwork.