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What
is a point?
A point is a loan origination fee, or
prepaid interest, equal to 1 percent of the
loan amount that you pay at closing.
No-point loans usually have higher
interest rates but save you money at
closing.
What
is a credit score?
A credit score is how a lender rates
your credit.
People with higher credit scores
usually obtain lower interest rates, so it
can benefit you if your credit is good.
Your credit score is a number between
400 and 900.
The magic number is 620.
If you score above 680, lenders will
usually consider you a premium borrower. If your number is below 620, you are likely to be rejected or
will need to consider a B or C paper loan.
If
my credit record is less than excellent, can
I still buy a home?
YES!
Lenders rate loan applicants by their
credit risk.
Borrowers are rated from A to E, with
A-rated borrowers being the best credit
risks. The better your rating, the better the loan terms a lender
will offer you.
If your credit rating is less than an
A, your best bet for getting a mortgage is
to see a mortgage broker that specializes in
less than A grade loans.
What
closing costs will the buyer usually pay?
Buyers can usually expect to pay fees
associated with getting a home loan and for
other fees such as:
origination fee, appraisal fee,
credit report, closing fees, state taxes,
title insurance, transfer taxes, inspection
fees, private mortgage insurance (which
protects the lender in case of buyer
default), and hazard insurance.
The
amount of your closing costs will vary
depending on the kind of loan you get and
the lender, but plan on budgeting 3-4
percent of the purchase price for a
conventional loan.
This
information is geared toward helping you
understand how the loan process works.
Please
make an appointment with a loan officer or
mortgage broker.
They will be an invaluable source in
completing your home purchase!
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