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Month: March 2022

loans for first time home buyers

Loans for First-time Homebuyers: A Short Guide

Written by Altitude Home Loans on . Posted in Home Equity Loan.

Here at Altitude Home Loans, we aim to help you find your dream home. Call us today at 520-500-1010 to speak with our mortgage experts.

If you are one of the many Americans seeking a loan for your first home, the process may seem daunting. Thankfully, getting loans for first-time homebuyers is one of our primary missions at Altitude Home Loans. The home purchasing officers in Tucson from Altitude Home Loans can guide you through the process from start to finish.

What Is a First-time Homebuyer?

Even if you’ve owned a home in the past, you can still meet the criteria for a first-time buyer. The rules state that you qualify as a first-time homebuyer if you haven’t owned a qualifying home in the past three years. That said, there are a few caveats.

To qualify as a first-time buyer, you can’t currently own investment property, but you can own property that isn’t up to code. Also, if you’ve owned property with a spouse before divorce, you may qualify.

Types of Mortgages

Conventional

Conforming conventional mortgages abide by the rules of government-sponsored entities (GSEs) like Freddie Mac and Fannie Mae. GSEs don’t issue loans but guarantee loans from institutions that meet their guidelines.

Conforming conventional loans sometimes require more substantial down payments, charge a larger monthly mortgage payment, and are harder to qualify for in general. These loans are often fixed. For 2022, the maximum loan amount is $647,200.

With nonconforming conventional loans, the specific lender sets its loan guidelines.

Floating

Floating loans include adjustable-rate mortgages. They offer low introductory interest rates for more manageable initial payments. A floating-rate mortgage payment can increase substantially after a set period.

Fixed-rate

The interest rate doesn’t change during the loan term of a fixed-rate mortgage, which can bode well for the homeowner if the initial interest rate is low.

Mortgage Programs for First-time Homebuyers

HUD-FHA

The Federal Housing Administration (FHA) is a division of the Department of Housing and Urban Development. Mortgage loans from the FHA have looser credit requirements and offer down payments as low as 3.5%, as opposed to 20%.

VA Loans

The United States Department of Veterans Affairs (VA) backs loans from lenders who meet their guidelines. If you qualify, no down payment may be required.

USDA

Backed by the U.S. Department of Agriculture (USDA), these loans go to low-income rural residents. The USDA can guarantee loans with very low down payments. They also offer direct loans with interest rates as low as 1%.

Special Loan Programs

Down Payment Assistance

HUD maintains lists of state agencies that help with down payments. Certain groups like low-income people often qualify. To see whether you are eligible, contact your specific state agency.

People can use up to $10,000 of their IRA (whether traditional or Roth) for down payments, although Roth owners need to have had an account for at least five years.At Altitude Home Loans, we work hard to mitigate the mistakes of first-time homebuyers. Call us now at 520-500-1010 to secure the right mortgage for your needs.

prequalified vs preapproved

Prequalified vs. Preapproved Loans: What’s the Difference?

Written by Altitude Home Loans on . Posted in Mortgage.

Whether you’re a first-time homebuyer or moving up the property ladder, the loan process can seem complicated. Mortgage loans are essential for most aspiring homeowners. Fortunately, the process can be straightforward with proper guidance.

At Altitude Home Loans, our team understands that a bit of information goes a long way toward relieving stress during the home buying process. We’re Tucson’s trusted home loan officers, and we’re here to help.

In this blog, we talk about two stages in the mortgage loan process that people often get mixed up: prequalified vs. preapproved. If you’re just getting started with your home loan applications, brushing up on what each of these phases means will help you prepare for every step of the journey toward your new home.

To learn more about home loans, buying a home, and more, browse our blog or reach out to us at Altitude Home Loans today.

What Is Mortgage Prequalification?

If you’re preparing to buy a home, you may already be familiar with the term “prequalification.” During this stage, homebuyers receive estimates on their borrowing potential. Lenders determine a buyer’s borrowing potential using several factors, including asset information, credit checks, and income.

The primary difference between a prequalified vs. preapproved loan application is that preapproved loans have been vetted and backed by the lender. Prequalified loans typically require more research before reaching preapproval. Many lenders may provide prequalification based on self-reported financial details, so be sure to be as accurate as possible.

If you’re an aspiring buyer beginning the home loan application process, it pays to:

  • Check your credit score
  • Obtain records of your tax returns
  • Collect proof of income
  • Obtain banking statements

Lenders generally require these documents during the early stages of mortgage loan applications. Having them handy will speed up the process for you and the lender.

What Is Mortgage Preapproval?

Mortgage preapproval comes after prequalification. During this stage, lenders take extra steps to verify a potential buyer’s credit history, income, and other financial information.

A preapproval letter provides buyers with proof of borrowing status and helps them shop for homes within an appropriate price range. Preapproval is a critical step and is as close to buying a home as a buyer can get without a purchase contract in hand.

How Long Does Preapproval Take?

Preapproval times may vary depending on the lending institution. Always check with your lender before beginning the mortgage loan application process. Be sure to ask critical questions such as:

  • Application requirements
  • What to expect during the application process
  • Potential interest rates
  • The current state of the real estate market in your target area

Learn More about Mortgage Loans

If you’re ready to buy a new home, don’t let the complexity of the mortgage loan process stop you short. At Altitude Home Loans, our team is here to help you learn about the steps when buying a house, including what it means to be prequalified vs. preapproved, how to choose the right home for your needs, and more.

To get started on your journey to a new home, reach out to us today.