your alabama mortgage brokers
Why Have a mortgage broker?
Not sure why you need a mortgage broker? We understand. What a mortgage broker does is they act as an intermediary and broker mortgage loans on behalf of their customers. Traditional lending institutions, like banks and other lenders, have people sell their own specific loans. Now, as the mortgage market has become more competitive, the role of a mortgage broker has become more popular and necessary. The purpose of a mortgage broker is to find a bank or direct lender that will offer the specific loan that the client wants and needs. This is our goal at Motto Mortgage Superior. We want our customers to leave with the right mortgage loan for their specific needs. Loans are not one size fits all.
You might be wondering what the difference is between a mortgage broker and a traditional mortgage lender. A mortgage broker works as an intermediary between the borrower and the mortgage lender, while a loan officer usually works directly for a specific lender. A loan officer working for a bank or other institution has a vested interest in selling you a loan from their lender, not necessarily the best loan for your needs. 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. Our only job is to make sure you get what you need, not sell from any particular lender.
Buying Your first home in Alabama?
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! If Alabama is your home sweet home, you’re in luck. Since 1980, Alabama Housing Finance Authority has been working to make first time home buying accessible and affordable to over seventy thousand families so far. Along with Alabama Housing Finance Authority, some nationally available loan programs may also reduce barriers to homeownership.
The Alabama Housing Finance Authority offers first time and repeat home buyers affordable home loans for buying a new or existing home, but not for refinancing. Down payment assistance programs eliminate the need to save for a big cash down payment. Reduced mortgage insurance payments may also be possible. In addition, Mortgage Credit Certificates cut your federal income tax, leaving you more income to apply toward qualifying for a mortgage. Alabama Housing Finance Authority eligibility requires a minimum credit score of 620. Certain income and purchase price limitations apply. Alabama Housing Finance Authority also requires that you move in within sixty days after closing. AHFA offers three percent down payment assistance and a mortgage insurance discount with a conventional mortgage loan. The Alabama Step Up program is best for down payment assistance and low mortgage insurance. Alabama Mortgage Credit Certificates are best for tax credits that can be put toward the price of a down payment. Ask your mortgage broker about more information about buying a home in the great state of Alabama.
do you qualify for an FHA loan?
A Federal Housing Administration loan is different from a conventional loan. The primary difference is that an FHA loan 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. There are qualifications in order to apply for a Federal Housing Administration loan that you will need to know. The wonderful thing about the Federal Housing Loan program is that it 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, which you should be able to prove through payment records or tax returns. Most lenders will want to be able see that you have worked for a year or two in the same field, and preferably for 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.
One of the primary things that will qualify you for a Federal Housing Administration loan is whether or not you can afford the payments in addition to any currently existing debt. Your mortgage payment added to any other monthly payments, like student loans or a car payment, must not exceed forty-eight percent of your monthly income. If you don’t think you will qualify for this yet, you can focus on paying down as much of your other debt as possible before committing to buying a home. 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?
Loan programs exist on a national level that aim to make home ownership more accessible by reducing 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. With predictable monthly rates and 30 year terms, a fixed-rate mortgage works for many. For buyers with low credit scores, an adjustable-rate mortgage is a good option. The FHA loan, mentioned above, is a great option for home buyers who don’t have enough savings for a down payment. Veterans can benefit from the VA loan. the VA home loan is government backed and therefore has strict requirements on the type of home buyers can purchase with a VA loan. The USDA loan is another government sponsored loan, which is designed for people living in rural areas who can’t afford a full down payment. These loans are designed to expand rural areas and make homeownership more accessible. 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.