Whether you’re a first-time homebuyer or it’s been several decades since you bought a new home, chances are, you’ve got many questions. While the loan specialists at Mortgage Atlanta aren’t really prepared to answer your construction or interior design inquiries, we are well-equipped to address your mortgage questions. We’ve pulled together a list of the Top 10 questions we field regularly. If you don’t find all the answers to your mortgage questions below, we welcome the opportunity to answer them on a call, via email, or during a face-to-face meeting at our Marietta office.
We’ve all done it. We’ve driven through neighborhoods or pored over listings in search of our dream homes. Unfortunately, that ultimate dream home isn’t always within reach – right now, that is. A great place to start learning how much home you can afford is by taking a long hard look at your current budget. First, consider your household income, regular monthly debts, and how much is allotted for rent. Then, give yourself some wiggle room for unexpected expenses and savings to find your “comfort zone.” A good rule of thumb is roughly 25% of your monthly income, but remember that a mortgage payment will include more than just the house price broken into 30 years of payments. Once you’ve landed on a number you’re comfortable with, use a mortgage calculator – like the one featured on Mortgage Atlanta’s home page – to discover how much home you can afford.
While some loan applications can be daunting, at Mortgage Atlanta, we endeavor to make it as simple as possible. It’s as easy as clicking the “APPLY NOW” button on our home page, creating an account in our system, and filling out all required fields. You’ll be asked to provide proof of employment and a number of financial documents, including bank and investment account statements, pay stubs, W-2s, and more. We will pull a credit report on you to ensure you meet our mortgage products' minimum credit score requirements. You’ll need to keep your finances in order and be careful not to incur significant expenses as we make our way to the closing table. Any dips in your credit score may derail your ability to qualify.
Think of it as “homecoming vs. prom.” A pre-qualification is a less formal step – requiring only the submission of your income, assets, and estimated down payment. A preapproval is more formal and involved. It requires the same information as a pre-qualification but with financial proof to back it up and the submission of your loan for underwriting. While the latter will require a little more work on your part to pull all the financial pieces together, it will make you more attractive to sellers, which is an excellent thing in a competitive housing market. To make prequalification as easy as possible for our clients, Mortgage Atlanta is proud to offer TruQual.
If you can save 20% of your home’s asking price, you can avoid paying Private Mortgage Insurance (PMI) – marking off another line item on your monthly mortgage payment. However, 20% can be a big ask for many first-time homebuyers. If you can save 10-15%, that would be the next best thing. But if you cannot save more than 3.0%, a variety of loan options will still work for you. To learn more, read our blog: Busting the “20% Down Payment” Home Loan Myth.
Between Conventional or Jumbo, Fixed or Adjustable, and VA or FHA, exploring the wide variety of mortgage loan options that may be available to you can be daunting. But, when you tap the loan specialists at Mortgage Atlanta, you can rest assured that we’ll not only find the best mortgage option to fit your needs, we’ll explain WHY it’s your best option. We may even compare and contrast two or more options to learn the best fit for you.
As mentioned above, your mortgage payment isn’t a clean breakdown of your home’s purchase price spread out over 360 months. Instead, it’s that number MINUS your downpayment to determine your Principal loan amount PLUS Interest, Homeowners Insurance, Property Taxes, Home Owners Association Dues, and Private Mortgage Insurance (UNLESS you were able to put 20% down on your home).
Once you’ve been prequalified or preapproved for a loan, have found the home you hope to buy, and have landed on which mortgage loan option is ideal for you, it’s time to revisit our mortgage calculator to get a better read on your monthly payment. First, you can visit the listing in MLS to learn a lot of the information you’ll need to get the most accurate number, such as annual taxes, annual insurance, and monthly HOA. Then, you can also do an online search of today’s interest rates to plug into the calculator and land on a possible monthly payment, complete with a breakdown of Principal & Interest (P&I), Monthly Taxes, and Monthly Insurance.
Interest rates fluctuate daily, and you won’t be able to lock in your rate until 30 to 60 days from your mortgage loan closing date. To better understand how interest rates impact your monthly mortgage payments, visit our mortgage rate calculator, plug in all the requested information, and use a variety of interest rates to find your potential range. Also, know that if you opt for an Adjustable-Rate Mortgage, interest rates could impact your mortgage payments to the good or the not-so-good in three, five, or seven years from your closing date.
In its most basic terms, an escrow account is a savings instrument we can set up upon closing your new home loan. As you make payments towards your mortgage, a set amount will be placed in escrow to cover future expenses like home insurance or taxes that only hit annually and are paid directly from your escrow account. It’s a seamless solution, so you won’t have to worry about coming up with lump sums on the fly or even striking a check. The savings and payments are all made for you.
If you opted to go with an Adjustable-Rate Mortgage, you’re nearing the end of your three-to-seven-year term, and current insurance rates are considerably lower than the initial rate you locked in before closing; refinancing to a conventional fixed loan may be an excellent solution for you. On the other hand, suppose you already have a conventional fixed loan but are locked in at a higher interest rate than what is currently out there. In that case, refinancing may also be a good option for you, but ONLY if your monthly savings will offset the closing costs of your refinance. If you’ve already got a decent interest rate and a fixed loan, but want a shorter loan term, don’t feel you need to refinance a 30-year loan to a 15-year loan. Simply make larger monthly payments to pay your loan off faster.
At Mortgage Atlanta, we pride ourselves on being more than a mortgage company. We are YOUR mortgage company. We exist to be the best in the industry by putting your interests first. If you still have questions, please call us at 678.564.1522, email our company president Brian Berman at bberman@mortgage-atlanta.com, fill out our online contact form, or schedule a meeting at our office – located at 601 Woodlawn Dr. Ste 340 in Marietta. We wish you the best of luck in your new home search!
