The Most Common Questions Regarding Mortgages

The Most Common Questions Regarding Mortgages

The Most Common Questions Regarding Mortgages

Mortgages can be a bit confusing, and with something as important as your home it is crucial that you understand every aspect of mortgages.

Not entirely sure how a mortgage operates? Don’t worry – you’re not alone. The entire process is filled with perplexing questions right from the get-go. Questions like how big a down payment do you need? Why is your interest rate not as great as you had hoped before you started this process? All great questions which have fairly comprehensive answers. Here are the most common questions and answers regarding mortgages.

Q. Do I really need a 20 percent down payment?

A. A 20 percent down payment is the golden standard for mortgages and it definitely helps. But it is not required. A Federal Housing Administration Loan allows borrowers to put down as little as 3.5 percent. There are certain qualifications which you have to meet. E.g. a minimum credit score of 500 and steady employment for a minimum of two years.

Q. Is a 30-year fixed-rate loan the best option?

A. When it comes to the type of mortgage, it depends on your intentions. If you intend on staying long-term, a fixed-rate mortgage might be your best bet because it locks in that interest rate regardless of what happens to the real estate market. An adjustable-rate mortgage, however, may serve you if you plan to move quickly and want to take advantage of the low interest rates.

Q. What happens if I can’t pay my mortgage?

A. Depending on the lender, you may have a grace period of about a week or two to get it in. A missed period means your account becomes delinquent, which immediately hurts your credit score. If you know you’re going to miss a payment, contact your lender as soon as you can to discuss your options.

Contact Elvin Wesley at Ranch & Coast Mortgage Group Inc. for all of your home loan needs throughout Solana Beach and San Diego County, as well as all of California.