First Time Home Buyers – Frequently Asked Questions

A mortgage broker is essentially the go-between who matches borrowers (the soon-to-be homeowner) with mortgage lenders (the institutions that provide you with a home loan). Your mortgage broker’s job is to find the right mortgage and the best rates for your needs and budget.  Here’s a quick breakdown:

• Mortgage Broker: Your broker finds the right lender for you and helps ensure the loan process is completed.
• Mortgage Lender: Your lender is the organization or company that creates the home loan you use to buy a new home. Mortgage lenders have only one underwriting program and can be very inflexible.

At Classic Home Mortgage, Dan Crance and his team of professionals have over 30 years of experience and the tools to find you the best loan available. Whether you’re buying, refinancing, selling, or building, Classic Home Mortgage will bring unparalleled insight and assistance to your home loan experience.

Future homeowners begin the mortgage process by applying (With Dan www.dcymm.com) to a mortgage lending company. Typically, the lender will need proof that the borrower can repay the loan. This evidence may come in the form of tax returns, bank statements, investment statements, and proof of employment. Usually, Dan will conduct a credit check too.

Once your application is approved, your lender will find a loan that best suits your budget. At Classic Home Mortgage, we recommend getting pre-approved, even if you’re still shopping for a new home. Getting pre-approved for a mortgage will give you an advantage in hot housing markets because you’ll be able to prove to sellers that you have the finances needed to buy a home.

Yes, it would be our pleasure. We get this question all the time, so we’re happy you asked. Your mortgage is a loan type used to buy or maintain your  home. You, the borrower, pay a lender over time, usually in monthly increments, separated into principal and interest.

The most common types of loan programs include:

Conventional Loans: Also called Freddie Mac and Fannie Mae, these loans aren’t insured by the U.S. government. Instead, the government sponsors Fannie and Freddie by supplying liquidity to allow for a continuous credit flow. Typically, with Freddie Mac mortgages and Fannie Mae mortgages, you put down between 3%, 5% and 10%  of the price of the home as a down payment. However, if you put down 20% or more, you will not be required to add mortgage insurance to your loan.

FHA Loans: FHA mortgages are great for first-time homebuyers because down payments can be 3.5% of the home’s purchase price, and many closing fees and costs may be included in your home loan. Generally, FHA mortgages let homeowners make lower down payments, reduce closing fees, and make qualifying for a home loan easier. Unlike some conventional loans, FHA loans require borrowers to have upfront and ongoing mortgage insurance.

USDA Loans: If you live in a rural area and want to buy a home, this type of loan may be a good fit. USDA loans are great for rural borrowers. One of the most popular reasons why homeowners choose USDA loans is because borrowers don’t have to put any money down at all. If you think you might need a USDA loan, contact Dan to learn more about the requirements of the USDA home loan programs

Yes, there are loans created for our honored military men and women called VA or Veteran’s Assistance loans. You could qualify if you are a retired or active member of the Army, Navy, Marines, Air Force, National Guardsmen, or Reservists. If you’re a Disabled Veteran, you could qualify for even more benefits through a VA mortgage loan.

Benefits of VA loans include:

• Guarantee of No Money Down up to Certain Limits
• Monthly Mortgage Insurance Not Required
• All VA Loans Are Assumable with Certain Conditions
• Easier for Veterans to Qualify Vs. Conventional Home Loans
• VA Loans Qualify for Refinancing

If you’re a military veteran looking for a trustworthy mortgage broker, contact Dan Crance with Classic Home Mortgage today. It would be his pleasure to serve you! And Thank you for your service!

Without getting too complicated, refinancing is a process that pays off your current mortgage with a new mortgage. In many circumstances, the new mortgage has a better interest rate. Most homeowners consider refinancing to lower their monthly payments and overall interest rates or to alter the length of their current mortgage. Some homeowners choose a cash-out refinance, which allows them to get cash using the equity they have built in their homes.

Additional benefits of refinancing your mortgage include: 

• Pay Off Home Loan Early – Some borrowers choose to reduce the length of their loan by refinancing, so they can pay off their loan early.
• Lock In Fixed Rate – Sometimes, homeowners with ARMs (adjustable rate mortgages) refinance their loans to get a new one with a fixed interest rate that does not fluctuate. 
• Eliminate Mortgage Insurance – With the exception of VA loans, most homeowners must pay PMI (private mortgage insurance) if they finance 80% or more of their home. In some cases, refinancing allows you to eliminate PMI. 
• Get Money for Home Repairs or Improvements – Once you build equity in your home, you have the option to initiate a cash-out refinance. Doing so gives you access to funds that you can use to finance home improvements, repairs or pay for large purchases.

Underwriting is a process that your mortgage lender will use to verify your income, debt, assets, and other property details so that you may get final approval on a loan. When you’re ready to buy a home, your mortgage underwriter looks over your finances to see how much risk your mortgage lender will take if they grant you a home loan. Your underwriter will also work closely with you to ensure all proper paperwork is submitted for your new loan. When you boil it down to the basics, your underwriter ensures you don’t finalize a mortgage that you can’t afford.