Homeownership
Homeownership: Mortgage Loans

Apply for Mortgage Pre-Approval

The first step in mortgaging a house is the pre-approval process. This tells you how much a lender is willing to lend you. Their decision is based on your income, credit, and assets. Knowing how much a lender is willing to let you borrow gives you a clearer idea of which houses you’ll be able to afford and narrow your search.
What does your credit have to be to buy a house?

Credit minimums for buying a house depend on your mortgage. But the higher your credit score, the better your interest rates will be. Generally, you’ll need a minimum credit score of 620 to secure a loan.
Although it’s technically possible to secure a loan with a credit score in the 500s, lenders typically won’t accept applicants with less than a 620.
What are the mortgage loan interest rates? (process because the numbers change)

The mortgage loan interest rates change daily, so there’s no single variable. Nerd Wallet provides accurate mortgage and refinances rates daily so that you can keep up to date with inflation and deflation. You can check it out here!
Which bank is best for a mortgage loan?

Finding the best bank for a mortgage loan comes down to choosing the bank that works best for you and your situation. What do you value most or need from your mortgage loan? If you’re dealing with low credit, you should pick a bank that offers programs and works with people with low credit scores.
Do credit unions offer better mortgages than big banks?
Credit unions are known for offering mortgages with low rates and fees. Due to the non-profit status, credit unions aren’t seeking large profit margins on the loans. This sounds great and all, but unfortunately, not everyone is eligible for membership with a credit union, and because of having such low rates, they have limited loans available.
Some of the reasons it’s difficult to receive a loan from a credit union include:
- Low credit score
- High DTI ratio
- Insufficient income
- Unstable employment
- The loan’s purpose and your reason for it are not the same
How does the home loan calculator work?

The home loan calculator (also called a mortgage calculator) looks at the down payment and percentage, loan length, and interest rate. It also considers principal and interest, homeowner’s insurance, property tax, and HOA fees.
If your down payment is less than 20% of the total cost of the home, you’ll also have to pay mortgage insurance, which could add an additional $75-$350 to your monthly payment.
You can see how much monthly payments will cost you and how long it will take to pay off your house by making extra payments. Bankrate has a free, user-friendly home loan calculator that you can check out for a free loan estimate.
- The down payment is the portion of the sale that’s not financed. Larger down payments will likely mean lower rates offered by the lender.
- The length of your loan is the amount of time you’ve been given to repay the loan. Payment increments will be smaller when you agree on a longer mortgage term, and vice versa; a shorter loan term will mean larger payments.
- The interest rate determines how much you’ll pay annually to borrow money from your loan.
Submit an Application

Documents that are likely to be required for a loan application include:
- ID and Social Security number
- Pays stubs from the past 30 days
- W-2s or I-9s from the past two years
- Proof of any other sources of income
- Federal tax returns
- Recent bank statements
- Long term debt details (e.g., student loans)
- Real estate property information
Closing Disclosure

Your lender will provide you with a Closing Disclosure (CD) that shows the agreement’s actual terms and final costs. During this time, ask your lender any questions you have. After obtaining the CD, you will arrange the down payment and closing costs. At the closing, be prepared with a cashier’s check, proof of homeowner’s insurance, and a photo ID like your driver’s license or passport. Once you’ve read through everything thoroughly, you’ll sign your mortgage documents with your closing agent.
What is Cash-Out Refinance?

Cash-Out Refinancing enables homeowners whose home equity has increased to pay off their initial mortgage with a second, larger mortgage. You’re essentially taking equity out of your house as cash. The cash comes from the difference between the original and second mortgages.
To be eligible for a cash-out refinance, you generally need to have at least 20 percent equity in your home. This means a maximum of 80 percent loan-to-value (LTV) ratio of your house’s current market value. The LTV ratio is the amount of your existing or new loan divided by your home’s appraisal value. Here’s an LTV ratio calculator to help!
Century 21 Northwest is here to help!

Our agents are well-versed in all the programs available for your next home purchase, getting you into the right home with the right mortgage agreement for you and your family.
Partner with us today!