Purchasing Your New Home
Building a new home is an exciting and challenging experience. When it comes to financing a new build, the process can seem confusing. We are committed to helping new home buyers understand basic financial information so that you can make informed decisions and be relieved of some of the stress during this time. Read below to learn about the types of information you’ll need to purchase a new home. We’ve also provided a list of financing terms to help you get familiar with what all is involved in the process.
What You Will Need: Submitting your pre-qualification application first will give you the confidence to go out and find the home of your dreams. First you will need to fill out a Pre-Qualification Application with your Mortgage Lender. You’ll need to provide the following documents:
Last two months’ bank statements
Last month of pay stubs
Copy of current driver’s license
Last two years of W-2s
Helpful Financing Terms:
Credit Report: A report from an independent credit-rating service listing a person’s current obligations to creditors. The credit report shows how much is owed, as well as whether payments were generally made on time.
Debt-to-Income Ratio: This ratio, expressed as a percentage, is derived by dividing housing expenses by gross monthly income. This is a tool used in the loan qualification process by the lender.
Down Payment: The buyer pays this portion of the price before moving in. This is usually paid at closing and is a percentage of the home’s total purchase price.
Interest Rate: The cost of borrowing, expressed as an annual percentage of the principal. The loan consultant will be able to provide you with the latest rates available.
Pre-Qualification: Another name for mortgage analysis. This will provide you with a preliminary view of your ability to obtain a loan.
Lock: Lender’s guarantee that the mortgage rate quoted will be good for a specific number of days from application.
Mortgage Insurance: Money paid to insure the mortgage when the down payment is less than 20% of the purchase price.
Origination Fee: The fee charged by a lender computed as a percentage of the loan’s face value.
Truth-in-Lending: A federal law requiring disclosure of the annual percentage rate (APR) to homebuyers shortly after they apply for a loan. Also known as Regulation Z.
Underwriting: The decision whether to make a loan to a potential homebuyer based on credit, employment, assets and other factors. They also match the risk of making a loan to an appropriate rate and term or loan amount.
For additional questions concerning the financing of your new home, contact Brookside Homes.