Embarking on the journey of homeownership is an exciting and significant step in anyone's life. However, the process can often be accompanied by a multitude of questions and uncertainties. To provide clarity and guidance, we've compiled a list of frequently asked questions (FAQs) about homebuying. From pre-approval timelines to navigating through financial hurdles such as bankruptcy and down payments, our FAQ section aims to address common concerns and empower you with the knowledge needed to make informed decisions on your path to owning a home.
How Quickly Can I Get Pre-Approved?
You can obtain pre-approval in as little as 24-48 hours upon completing the application and providing the required documents. These documents typically include 2 years of federal tax returns, 2 years of W-2 forms, 30 days of pay stubs, and 2 months of bank statements. If you're self-employed, W-2s or pay stubs aren't necessary.
Is Being Pre-Approved the Same as Being Pre-Qualified?
Pre-qualification and pre-approval are distinct processes. Pre-qualification provides an estimate of your borrowing capacity without verifying your information. Pre-approval involves a lender verifying your income, assets, and liabilities to approve you for a specific loan amount.
Can I Get a Loan if I'm Currently Unemployed?
Unfortunately, we cannot approve a loan without a verifiable income stream. Typically, two years of continuous employment are required.
Is it Possible to Buy a Home with No Down Payment?
Yes, VA or USDA loans offer the possibility of getting pre-approved without a down payment. Additionally, loan approval is feasible if you're using gifted funds for the down payment.
Can I Buy a Home After Filing for Bankruptcy?
You cannot immediately buy a home after bankruptcy. However, you may apply for an FHA or VA loan two years after your bankruptcy discharge. An alternative option is our "Back to Work" program, available 12 months after your discharge from bankruptcy, foreclosure, short sale, or deed in lieu.
Are Adjustable Rates Advisable?
Adjustable Rate Mortgages (ARMs) can be beneficial if you plan to sell before the fixed period ends, typically 5-7 years. During this period, you'll enjoy a low rate, with the possibility of rates changing afterward based on market conditions. ARMs are suitable for those intending to move within this timeframe as they offer advantages such as putting more money toward the principal, no negative amortization, no balloon payments, no pre-payment penalty, and the ability to take cash out of the home.
Can I Refinance Without an Appraisal?
Certain programs, including FHA, VA, and HARP (Freddie Mac & Fannie Mae), may allow refinancing without an appraisal.
Does Non-Bank Account Cash Count as Assets?
Assets play a crucial role in loan approval. Generally, assets must be seasoned, meaning they should appear in a bank account for at least 60 days. However, gifted funds are an exception, requiring only a gift letter for down payment purposes. If you're considering buying a home, use our mortgage calculator to estimate your monthly payments, and don't hesitate to contact our Loan Officers for guidance on current mortgage rates.
