When it comes to mortgages, we know you have questions. Buying a home is a major purchase, so there are plenty of common questions that our members ask us all the time. So if you’re feeling confused, you’re not alone.
First of all, don’t worry! You may feel a little overwhelmed in the beginning, but there are plenty of people on your side, ready to make the process go smoothly for you.
Our mortgage experts are here to guide you and put your mind at ease. In this video, we go over some of the most frequently asked questions we get about mortgages so you can get started with the answers you need.
VIDEO What documentation do I need to apply for a mortgage?
Lenders want to review your income and assets. A typical example would be two years of W2s, your most recent 30 day paystub and two months of bank statements.
You may not need physical copies of these documents, depending on your lender. Suncoast gives applicants the option to submit their documentation electronically to make the process easier and more efficient.
What’s the difference between prequalification and preapproval?
“A prequalification is just a conversation,” said Tammy Kiehl, retail mortgage originations manager for Suncoast Credit Union. “We’re going to sit down with you, talk to you, ask you some questions and manually calculate what you may qualify for in a mortgage.”
While prequalification can help you get an idea of what sort of mortgage might work for you, preapproval lets you get the process started. You will answer the same questions that you would on a prequalification, but the difference is your credit is pulled with a preapproval. This gives the lender a better idea of your borrowing capabilities.
Another common question about mortgage preapprovals is if they have to be done in-person. This depends on the financial institution. At Suncoast, you can get pre-approved for a mortgage in-person or online. Our online approvals can be done in 24 hours or less.
What is private mortgage insurance (PMI)?
Private mortgage insurance is insurance that covers the lender if the borrower defaults on a mortgage loan. It is often required for borrowers who are putting less than 20% down on their mortgage.
However, some lenders may have options to save on PMI costs. For example, Suncoast offers a number of
mortgage options with no PMI requirements. How much are closing costs?
“Typical closing costs vary based on loan amount,” Kiehl said. “Average is anywhere from 2.8% to 3.2% of your loan amount.”
Sometimes you may be able to get a loan that doesn’t require the standard closing costs. For example, Suncoast may offer promotions that
pay your closing costs for you. What advice do you have for a first-time homebuyer?
There is a lot to consider when
buying your first home, but a simple way to start is to sit down and look at your budget.
“Ask yourself what you can realistically afford in a mortgage,” Kiehl said. “Then at that point, see what’s out in your market.”
Take into consideration things like what area you would like to live in and whether you are looking for a house or a condo. Pay attention to whether or not a property comes with homeowner’s association dues, as that can impact your budget.
First-time homebuyer may even qualify for special loan options. Suncoast offers
first-time homebuyer mortgage options with little money down and no PMI requirements to help you save money.
Figure out “what you feel comfortable with paying in a mortgage payment,” Kiehl said. “Then contact us at Suncoast Credit Union and we’ll be happy to sit down with you. We walk you through the process.”