your tennessee mortgage brokers
why you need a mortgage broker
What is a mortgage broker, and why have one? Excellent question. A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses like you. Traditionally, banks and other lending institutions have sold their own products. As markets for mortgages have become more competitive, however, the role of the mortgage broker has become more popular and more important. Mortgage brokers exist to find a bank or direct lender that will be willing to make the specific loan that you are wanting and needing. That’s our goal at Motto Mortgage Superior. We don’t just want to get you a mortgage loan, we want to get you the right mortgage loan for you.
You might be wondering: What’s the difference between a mortgage broker and a mortgage loan officer? A mortgage broker works as an intermediary between the borrower and the mortgage lender, while a loan officer usually works directly for the lender. That means that a loan officer has a vested interest in getting you to buy from their lender, not necessarily the lender with the best loan for you. A mortgage broker has no affiliations to a particular lender and is free to give you all of your mortgage loan options. We want you to have choices, information, and freedom to make the choice that’s right for you.
are you a first time home buyer?
As a first-time homebuyer, there might be a lot of unknowns. Whether it’s the mortgage lingo, types of home loans, or even down payment requirements, there’s a flood of new information that can be overwhelming. We want to make sure you feel confident and educated throughout the entire process. If you’ve never owned a home, you are considered a first-time homebuyer. But you may also qualify as a first-time home buyer if you have not been an owner in a primary residence for at least three years leading up to the purchase of your new home.
A house is most likely one of the biggest purchases you will ever make. If you have never applied for a home loan before, it can definitely feel daunting and overwhelming. But no worries! That’s why the Tennessee Housing Development Agency, or THDA, created a program to help first-time home buyers through the process. Some nationally available loan programs may also reduce barriers to homeownership. Here you can learn more about the first-time home buyer eligibility requirements in the great Volunteer State. Tennessee Housing Development Agency programs are available to Tennesseans who haven’t owned a home before as well as repeat buyers who haven’t lived in a home they own for at least the last three years, or people who are buying a home in an area designated as economically disadvantaged. Active-duty service members, veterans, and spouses are also eligible. If you want to buy a house but worry that you won’t qualify for a mortgage, the Tennessee Housing Development Agency Great Choice Home Loan program can help by providing down payment and closing cost assistance. First, the borrower must be a Tennessean. You must also have a minimum credit score of 640. Borrowers must meet income and loan requirements as required by the specific loan in question. Borrowers must also complete a home buyer education course to get down payment assistance. This program includes government-backed and conventional loan options. Great Choice mortgage payments also help fund programs for the elderly, people with disabilities, and the homeless. It includes 30 year fixed interest rate loans and are available from lenders throughout the state of Tennessee.
do you qualify for an FHA loan?
What is a Federal Housing Administration Loan? The main difference between FHA loans and conventional loans is the government insurance backing of the loan. FHA loans are insured by the government, while conventional mortgages are not. FHA loans help you buy a home with limited credit or a reduced down payment. We want you to know what you need to qualify for an FHA loan and what to expect when you apply. The FHA loan program makes it possible to purchase a home with as little as 3.5 percent down and with a lower credit score than required by traditional mortgages. Surprisingly, FHA loans are not just the first-time home buyers. They are also not only restricted to low-income applicants. In order to qualify for an FHA loan, you’ll need to have a verifiable income. You should be able to prove this with recent pay-stubs or tax returns. Most lenders want to see that you have worked for a year or two in the same field, if not the same employer. With the FHA program, a lender may be willing to accept a shorter work history. At the bare minimum, the FHA requires that applicants have an established credit history with at least two lines of credit like a student loan payment or a credit card payment.
The biggest factor in qualifying for an FHA loan is whether you can afford the payment as well as any existing debt. Your mortgage payment plus any other monthly payments such as a car loan or credit cards must not equal more than 48 percent of your monthly income. If you don’t think you will qualify for this yet, you should focus on paying down as much of your other debt as possible before committing to buying a home. You’ll also need an established credit history. The minimum credit score for a first-time home buyer is 580, but the FHA is not a lender – it’s the insurer. The lender who sets their minimum FHA credit score requirements could be as high as 640 for FHA loans, as opposed to 800 for conventional mortgages. Why would a home not qualify for an FHA loan? The borrower cannot purchase a home that exceeds the FHA loan limits. There are federally-set limits to how much you can borrow with an FHA loan that vary by state and county. Fortunately, the limits are high enough that nearly all borrowers should not need an FHA loan to buy a more expensive home.
what loan is right for you?
There are nationally available loan programs that may reduce barriers to homeownership. A fixed-rate loan is the most common type of conventional loan and is perfect for homeowners who crave predictability and aren’t going to move any time soon. An adjustable-rate mortgage is a good option for home buyers with lower credit scores. The FHA loan, mentioned above, is right for home buyers without a lot of savings for a down payment. The VA loan is for veterans who served 90 days consecutively during wartime, 180 days during peacetime, or six years in the reserves. Because this home loan is government backed, the VA has strict requirements on the type of home buyers can purchase with a VA loan. The USDA loan is another government sponsored loan. It’s right for borrowers in rural areas who are struggling financially. These loans are designed to put homeownership within grasp for everyone. Lastly, a bridge loan, also known as a gap loan or repeat financing, is an excellent option if you’re purchasing a home before selling your previous residence. Homeowners with excellent credit and low debt-to-income ratios are right for this type of loan.