First Buy Mortgage Comparison
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We also add in the cost of property taxes, mortgage insurance and homeowners fees using loan limits and figures based on your location. You can also manually edit any of these fees in the tax insurance & HOA Fees section of this page.
In general, most homebuyers should aim to have 20% of their desired home price saved before applying for a mortgage. Being able to make a sizable down payment improves your chances of qualifying for the best mortgage rates. Your credit score and income are two additional factors that play a role in determining your mortgage rate and, therefore, your payments over time.
*This table depicts loan amortization for a $200,000 fixed-rate, 30-year mortgage. The payment calculations above do not include property taxes, homeowners insurance and private mortgage insurance (PMI).
If all occupying borrowers are first-time homebuyers, then at least one borrower is required to take homeownership education, regardless of LTV. Fannie Mae HomeView can be used to satisfy the homeownership education requirement. Learn more.
While many risky features of mortgages are now restricted or unavailable in the marketplace since the financial crisis, mortgages still have different terms and features. Key components include the loan term, loan type, and interest rate. Loan terms typically vary between 15 and 30 years. Loan types include Federal Housing Administration (FHA), Veterans Affairs (VA), and conventional loans. Interest rates can be fixed or adjustable, and the rates vary across lenders, even for the same consumer and for loans with otherwise identical product features. Consumers can shop for a mortgage by researching and inquiring with multiple lenders, applying for mortgages with multiple lenders, or applying for different kinds of loans.
Failing to shop means money lost for consumers. Consumers who consider the product offerings of multiple lenders or brokers may save substantial sums. For example, interest rates can span more than half a percent for a conventional mortgage for borrowers with a good credit rating and a 20 percent down payment. For a borrower taking out a 30-year fixed-rate loan for $200,000, getting an interest rate of 4 percent instead of 4.5 percent translates into almost $60 saved per month. Over the first five years, the borrower would save about $3,500 in mortgage payments. In addition, the lower interest rate means that the borrower would pay off an additional $1,400 in principal in the first five years, building greater equity.
One key feature of Owning a Home is the Rate Checker tool. In its beta release, this tool helps consumers understand what interest rates may be available to them by using the same underwriting variables that lenders use on their internal rate sheets. These are the documents lenders use to calculate what interest rate is available for a particular combination of loan type, property value, loan amount, and credit score. The data behind the Rate Checker is updated daily and includes information from large banks, regional banks, and credit unions and covers about 80 percent of the mortgage market.
Next is the Projected Payments section. This section gets broken into two sub-sections, Years 1-7 and 8-30. It is in two parts because it can vary based on whether or not a mortgage insurance payment is involved.
The payment structure gets broken down into estimated monthly payments, including the mortgage insurance of $82. This fee will get paid every month until paid enough for you to have 20 percent equity or an 80 percent loan to value in your property. In this case, it would be every month for seven years.
The first section is the Loan Costs, and the subheading gathers your Origination Charges, which is the most crucial section on this entire form. Origination Charges combine your Points, Application Fee, and Underwriting Fee.
Remember, the lender controls this section. Some lenders itemize a dozen different fees, and some include everything in one line item. Another term you may see is Origination or Origination Fee, which is a charge assessed by a mortgage lender to process your loan.
Also, first-time buyers tend to be younger, so they might not have a long credit history, which can translate into a lower credit score and therefore, a higher interest rate on the mortgage. This means finding loans and lenders that meet their financial needs is important.
Guaranteed Rate offers both branch locations and online access to borrowers who want to apply for a mortgage. Their paperless application process allows borrowers to send paperwork electronically as well as apply and keep track of the application process online.
Guaranteed Rate minimum credit score requirements differ depending on the mortgage. The lender offers loan options for buyers with credit scores as low as 600. The minimum requirements for each program are:
Guaranteed Rate offers both mortgages for buyers and refinancers. Its product line includes fixed and adjustable-rate mortgages (ARMs), conventional and jumbo mortgages, FHA, USDA and VA loans, as well as interest-only mortgages.
PNC also offers an innovative online experience called Home Insight, which provides a deep dive into the homebuying process, enabling customers to determine the mortgage payment they can afford and start shopping for homes with real-time rate quotes and loan products. It also allows customers who have applied for a loan to follow along with the approval process and upload supporting documents. In addition, the customer can invite real estate agents into the process to monitor progress.
The lender considers alternative credit data, such as rent and utility payments, when reviewing mortgage applications. Alternative credit data takes into account payments you make that are not traditionally included in credit reports. This can help borrowers who might not have a long credit history or had a prior bankruptcy show a good track record with on-time payments in areas that are not usually counted in traditional credit data.
LoanDepot is one of the largest non-bank mortgage lenders in the U.S., with more than 150 branches across the country and a robust online presence. Its loan products include conventional mortgages, government-backed loans and refinances.
LoanDepot customers can apply online for a mortgage. Once they submit their application, a loan officer will call them to go through the next steps, which include submitting income documentation and personal identification.
LoanDepot requires a minimum credit score of 620 for conventional and VA home loans, which is the average requirement for most lenders. For FHA mortgages, the credit requirement is less stringent, dipping to a 580 minimum. Finally, jumbo borrowers must have a minimum 700 credit score.
Bank of America is a big bank lender that offers mortgage and refinance loan products, along with full banking services. There are more than 5,000 branch locations in the U.S., in addition to its online mortgage options, which includes the Bank of America Digital Mortgage Experience. This provides customers with online applications, electronic signatures for documents and online rate locks. Borrowers also can connect with a lending specialist online.
Bank of America offers lower-than-average mortgage rates and the convenience of applying in-person or online. Their Affordable Loan Solution mortgage requires a low down payment of just 3% and no private mortgage insurance, which can save budget-minded borrowers hundreds of dollars per month.
Guild Mortgage offers both in-person and online mortgage services. With office locations in 31 states, borrowers who prefer to do business face-to-face can visit a branch location. Conversely, borrowers in 48 states (not in New York and New Jersey) can apply online through its MyMortgage digital mortgage program.
Guild Mortgage offers both branch locations and online access to borrowers who want to apply for a mortgage. Their paperless application process allows borrowers to send paperwork electronically as well as apply and keep track of the application process online.
Guild Mortgage minimum credit score requirements differ depending on the mortgage. The lender offers loan options for buyers with credit scores as low as 600. The minimum requirements for each program are:
Mr. Cooper is among the largest non-bank mortgage lenders in the country. Headquartered in Dallas, Mr. Cooper operates in all 50 states, offering the basic mortgage lineup: conventional, jumbo, FHA and VA loans.
Forbes Advisor reviewed 12 mortgage lenders that do business both online and in-person throughout the United States. The lenders we reviewed represent some of the largest mortgage lenders by volume, which include banks, credit unions and online lenders.
The best lenders for first-time homebuyers excelled in areas that are historically important for this group including low- to average-credit score requirements, low down payment options and availability of grant programs.
You can shop around and get multiple preapprovals and official loan estimates from lenders within a 45-day window. The multiple credit checks from lenders within that period will be recorded on your credit report as a single inquiry. So the impact on your credit is the same as long as the last credit check is within 45 days of the first.
One of the more popular options for first-time homebuyers is a Federal Housing Administration (FHA) loan. An FHA borrower can qualify with a lower credit score than required for conventional mortgages and buy a home with as little as 3.5% down. Because of this, however, FHA mortgage interest rates tend to be somewhat higher. 781b155fdc