Tag Archives: First Mortgage

Ask These Questions Before Applying for a Mortgage

Posted on by
Reply

Buying a home is a major financial decision, and the mortgage process can involve many unfamiliar terms, documents, and decisions.

Before you apply, it helps to know which questions to ask. Here are some to think about and discuss with your mortgage lender before you begin the application process.

1. How Much Home Can I Comfortably Afford?

Your lender can help you estimate how much you may qualify to borrow, but that number is only part of the picture.

Ask what your estimated monthly payment could look like for different home prices. Beyond principal and interest, your monthly housing costs may also include property taxes, homeowners insurance, mortgage insurance, and HOA fees.

Next, compare that estimate with your overall budget. Aim for a payment that feels manageable and still leaves you room for savings, everyday expenses, and your other financial obligations or loan payments.

2. How Much Should I Save for a Down Payment and Closing Costs?

A down payment is one of the most noticeable costs of buying a home, but it’s not the only upfront expense. Ask your lender how much you may need to budget for:

  • A down payment
  • Closing costs
  • Prepaid taxes or insurance
  • Inspections

The above amounts will vary depending on the mortgage loan and property you choose.

3. How Will My Credit and Existing Debt Affect My Mortgage Options?

Your credit history and current debt can significantly affect your mortgage approval. Ask how your credit profile may influence the loan options and rates available to you.

Understanding your debt-to-income ratio, which compares your monthly debt obligations to your gross monthly income, is another major factor to consider. Credit cards, auto loans, student loans, and other debt may all factor into that calculation.

If you aren’t quite ready to apply, ask whether there are steps you can take to strengthen your financial position before moving forward.

4. Should I Get Preapproved Before I Start Shopping?

If you’re serious about your home search, ask about mortgage preapproval. A lender typically reviews more detailed financial information during the preapproval process to estimate how much you may be able to borrow, subject to additional requirements and final loan approval.

A preapproval can help you establish a realistic price range before you begin touring homes. Ask what documentation you’ll need, how long the preapproval remains valid, and whether anything could affect it while you’re shopping.

5. Do I Qualify for a First-Time Homebuyer Program?

This is an important question to ask, even if you’re not sure whether you qualify.

First Financial, in partnership with the Federal Home Loan Bank of New York, offers Homebuyer Dream Program® options to eligible first-time homebuyers purchasing a primary residence in Monmouth or Ocean Counties.* These grants can help cover a down payment, closing costs, and homebuyer counseling services.

Eligibility requirements vary by option and may include household income, property location and other criteria. Funding is limited and available on a first-come, first-serve basis.

6. What Documents Will I Need?

Gathering documents ahead of time can help make the mortgage process easier. Your lender will likely request proof of your income, employment, assets and debt. The documents required depend on your financial situation and the type of mortgage you’re seeking.

Ask for a checklist early so you can start organizing what you’ll need. Our Homebuyer’s Guidebook is a helpful place to start.

7. What Should I Expect Between Application and Closing?

Before you apply, ask your lender to help walk you through the process. You may want to know:

  • What happens after you submit an application?
  • What does underwriting involve?
  • When will the home need to be appraised?
  • What could delay the process?
  • How long does the process typically take?
  • When will you receive final loan terms and closing information?

Understanding the steps ahead can make the process feel more manageable and help you respond quickly if additional information is requested.

Start the Conversation Early

You don’t need to have everything figured out before speaking with a mortgage lender. Starting the conversation early can help you see what you’re already doing well, what you may need to prepare for, and what could make homeownership more attainable.

The Loan Department at First Financial can help you explore mortgage options, discuss preapproval, and determine what you might qualify for.

Thinking about buying a home in Monmouth or Ocean County in NJ? Schedule a Mortgage Q&A session with us or call 732-312-1500, Option 4 to take the next step toward homeownership.**

*The FHLBNY and First Financial Federal Credit Union (FFFCU) reserve the right to change the Homebuyer Dream Program® terms and conditions at any time, without prior notice. The household also fully understands that the limited funds are available on a first-come, first-served basis and even if the household meets all of the terms and conditions, this does not guarantee that there may be funds available at the time that the household qualifies. The FHLBNY, in its sole discretion, may refuse to honor a Homebuyer Dream Program® funding request. The household further agrees that any proceeds, which will not be, or cease to be, used for the purposes approved by the FHLBNY will be recaptured and the unused, or improperly used, grant will be returned to the FHLBNY. The household will also acknowledge receipt of a copy of these terms and conditions.

**Subject to credit approval. Minimum mortgage loan amount is $100,000. Available on primary residence only. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a Mortgage and is open to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. Other terms & conditions may apply, see credit union for details. Qualified borrowers must meet eligibility requirements including, but not limited to, property location, loan amount, loan type, occupancy, property type, loan-to-value, debt-to-income ratios, FICO credit scores, refinance with cash out and other variables. NMLS CU ID: 685814. Equal Housing Lender.  

Tips for First Time Home Buyers

Posted on by
Reply

Even if you’re not a first time home buyer, looking for and financing a home can be stressful. When you don’t know where to begin or what to do, it can be even more stressful – especially because it probably will be the biggest purchase of your life. Check out these tips for first time homebuyers to get the most out of your home buying experience and keep it as painless as possible.

Determine how much house you can afford and get preapproved.

When you’re ready to look for your first home, it’s important to know how much home you can afford. This will narrow down your home search and will give you a realistic view of the types of homes you can buy inside of your price range. You will also avoid the temptation to purchase a home where you’ll struggle to make the payments.

Save up for a down payment. 

With such a big purchase, having a down payment to invest in your home is important. A good rule of thumb for a down payment is to save 20% of your mortgage. For instance, if you have a $100,000 mortgage, your target down payment is $20,000.

If 20% of your mortgage doesn’t seem feasible, there are other options out there for first time homebuyers that will allow you to save and invest a smaller amount into your mortgage. If you’re wondering how much you need to save to achieve your desired payment, check out one of our mortgage calculators for reference.

Pay off as much debt as possible.

One of the factors that will determine your creditworthiness is your debt-to-income ratio. A debt-to-income ratio measures the total amount of debt you’re paying off each month compared to the amount of income you’re bringing in within the same period. If the amount of debt you’re paying off is considerably more than your income, this will negatively impact your credit score. In turn, this will hurt your chances of being preapproved for and financing a mortgage.

Try to avoid inquiries on your credit report.

When you’re looking to finance your first home, one item that first time homebuyers seem to overlook is avoiding new lines of credit. For instance, getting a new cell phone, adding on television service, or even setting up a utility account will all affect your credit score and your credit inquiries.

Before you buy a house, your focus should be on maintaining and improving your credit score while saving as much as possible for a down payment and avoid building new avenues of credit.

Buying your first home is no easy feat. When you finance your home with First Financial, we’re with you every step of the way and you’ll be well on your way to opening the door to your new home! Contact us today to learn more about the mortgage process, and check out our educational guidebook to happy homeownership.

APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only, are subject to change without notice and may be adjusted based on several factors including, but not limited to, property location, loan amount, loan type, occupancy, property type, loan to value, debt to income ratios, FICO credit scores, refinance with cash out and other variables. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. NMLS CU ID: 685814