Conventional Fixed Rate Mortgages

The annual percentage rate (APR) you get is based on a range of factors. You can find out what rate you’re likely to get during the mortgage pre-approval process.

Here are a few things we’ll consider when offering you a great rate:

• Your credit score and repayment history
• Your debt-to-income (DTI) ratio
• Your loan amount or loan-to-value (LTV) ratio
• Your preferred loan term (shorter terms get lower rates)

The amount you can borrow is determined by factors such as your debt to income and credit score (or credit worthiness). We want to make sure you can comfortably afford your mortgage payments so you can enjoy your home for many years to come. It might even be your forever home!

The closing costs on a mortgage include the fees and charges for all the services needed to successfully purchase your home. The total can be about 3% to 6% of the purchase price, depending on the home value and where you live.

Closing costs may be divided into two types – costs related to the property and costs related to the mortgage loan.

Property-related closing costs may include:

• Appraisal fee to determine what the home is worth.
• Home inspection fee to evaluate the home before closing (an optional but recommended service)
• Title search to ensure there aren’t any issues with the title of the home, such as a tax lien.
• Title insurance to protect your lender in case there are issues with ownership after the sale.
• Prepaid taxes – you may need to pay six months to a year’s worth of property taxes in advance at closing.
• Settlement fee – fee for settlement agent to close your loan
• Homeowner’s insurance – 12 mos upfront and 3 mos in escrow account
• Prepaid interest – interest from the day of closing until the end of the month (under mortgage cost)

Mortgage-related closing costs may include:

• Credit report fee to check your credit report and score.
• Origination fee or commitment fee for creating the loan.
• Points can be paid upfront to lower the interest rate on your mortgage – this may raise your closing costs but reduce the amount of total interest you pay over the life of your loan.

If your credit report shows missed mortgage payments in your financial history, you may still be able to get a home loan. The answer will depend on a few factors including:

• Whether the late mortgage payments occurred recently (within the last year) or further in the past.
• Whether the late mortgage payments are the only example of missed payments in your financial history.
• Whether you have other types of late payments on your record and/or have had bills go to collection.

Keep in mind that repayment history comprises about 30% of your credit score so it’s an important factor in the qualification process. If you do qualify for your home loan, the missed payments will likely mean you get a higher APR than people who have not missed payments.

It may be challenging or impossible to get a mortgage with bad credit, but you don’t need perfect credit to get approved for a home loan! We require a credit score of at least 640 to qualify for a mortgage.

Note that people with lower qualifying credit scores will get higher rates than people with excellent credit.

Yes, we do need a down payment of at least 3% to 5% at the time of closing. A lower down payment lets you begin your homeownership journey sooner than if you had to save up the traditional 20%.

But a higher down payment means you can borrow less, so your monthly payments may be lower and you can save on interest. In general, try to put down as much as you can comfortably afford.