New Jersey and New York Mortgage QuestionsEveryone has advice when it comes to buying a home. But there are a few things that you should keep in mind specifically about mortgages.

Some of them may surprise you . . . and all of them can be explained by a licensed loan officer. Here are our top 3 things we think you should know about mortgages:

1 - The higher your credit score, the lower your interest rate can be. Think about it, the lender is taking a big risk in handing you a significant amount of money. They not only need to be confident you can repay it, they also want to ensure your financial house is in order. So they reserve the best loans for those with good credit scores. Your payment history and ability to manage credit is bundled into that three-digit score.


2 – Don’t chase interest rates. They fluctuate daily . . . sometimes hourly. It is likely the rates will change between the time you lock in a rate and when close on your home mortgage. But trying to anticipate a rate and beat the system most often results in borrowers missing a key deadline, not closing on time and potentially not getting the home they hoped to buy. Part of the decision to put an offer on a home should include your comfort level with the prevailing interest rates plus or minus .5%. If you can’t absorb that kind of adjustment to your anticipated payments, you need to work with your loan officer to set a different budget and consider a different home.

 3 – You don’t need 20% of the home value as your down payment. In fact, you may only need 3-5% down to get a mortgage. Your Loan Officer will help you explore all the options including VA Loans, USDA Loans, First Time Buyer and other incentives based on your financial status and the community you are hoping to live in. Remember, though, if you don’t put 20% down you will need to factor Mortgage Insurance into your monthly payments (along with property tax and homeowner insurance). Your loan officer will help you put it all together.

So keep an open mind, don’t make assumptions about your eligibility or the timeline, and check with an expert when you have questions or want to understand your options. A licensed loan officer, working with you and your Realtor can help you find the right home and the right home loan to fit your lifestyle, your timeline and your budget.