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US long term mortgage rates are at historically low levels. The goal is to prod prospective homebuyers to purchase homes. Most first time homebuyers need to get a mortgage, and this can be scary. However, if you have a little bit of knowledge, you’ll be able to handle the entire mortgage application process. If you need a Long Island mortgage rate check, you’re probably thinking about buying a home and need a mortgage. Below are some commonly asked questions about mortgage rates in Long Island.
Do I need great credit to get a Long Island mortgage?
Not necessarily. If you want to get a conventional mortgage with a FICO credit score as low as 620, it is entirely possible. It’s also possible to get a higher-cost FHA mortgage with a score in the 500’s. The lower your score, the higher the interest rate will be. On a $250k mortgage, the difference between a 620 credit score and a 760 score can be over $86,000 in savings over a 30 year loan.
How much of a down payment do I need?
The short answer is you can get a traditional mortgage with as little as 3% down. You can get an FHA with 3.5% down. You can get a VA or USDA with no money down. With a conventional or FHA loan you’ll have to pay for PMI if the down payment is less than 20% of the home’s sale price.
What are closing costs
The term closing costs refer to all of the fees you’ll pay before your loan is completed. This can include origination fees, title insurance, and more. Closing costs can vary, but are generally 2-3% of the home’s price.
Should I get a fixed rate, or adjustable rate mortgage
Interest rates are very low, as a result, fixed rate mortgages make sense. Most mortgages originating today in Long Island are fixed rate. Only 3% of buyers are choosing adjustable rate Long Island mortgage rates. Fixed rate mortgages are the best choice for most homebuyers. There are some situations where an ARM is better. If you expect to sell the house before the fixed interest period is over, and the rate starts to float, then an ARM could end up saving you thousands. During periods of falling interest rates, an ARM can allow you to get a low initial rate, and save you money later if Long Island mortgage rates continue to drop.
Should I lock my interest rate
Rate locks means you’re guaranteed todays interest rate for a period of time. If interested rates are going up, it’s a good idea to lock in your rate. There are several different types of mortgages to choose from. Conventional mortgage is tougher to qualify for, credit wise, but an fHA can be costlier. If you’re a veteran, a VA loan is the best option. If you plan on buying a home in a rural area, a USDA mortgage gives you a great no money down option.
What are discount points?
Discount points are money you pay up front on your mortgage in exchange for a lower interest rate. One point is 1% of the loan amount. Discount points are tax-deductible.
Should I get a 15 or 30 year Long Island mortgage loan
This depends on how much you want to stretch yourself. If you can afford higher monthly payments, then a 15 year mortgage has a better interest rate than a 30 year version. You’ll pay off your house quicker, and save tremendous amounts of money on interest. On a 30 year mortgage, you will pay less per month, but it can help you afford a bigger home.
What documents do I need to get a Long Island mortgage rate?
Income – last 2 years tax returns, W-2, 1099, and pay stubs. In addition, drivers license, and social security card is good, and bank statements. You should also have a proof of funds, and an explanation of where they came from. If some or all of your down payment is coming from a gift, you’ll need a gift letter from the source of the funds which confirm they are a gift and not a loan.
Pre-qualification is when a basic review of your finances have been done, in order to determine if you’d qualify for a mortgage. Unlike pre-qualification, a pre-approval is highly useful in the homebuying process. It’s essentially the same as applying for a mortgage, just without a specific home. As part of a pre-approval, a Long Island mortgage lender will check your credit, verify your income, and commit to giving you a certain amount of money. Pre-approval shows you’re serious about buying a home and likely to follow through on a bid.
Why does it take so long to get a mortgage
Mortgages take 30-60 days to originate. Many first times expect a longer waiting period. The short answer is that a lot of things need to happen before you are able to take ownership of your home.
How is my mortgage payment determined?
It all depends on your situation. There are 3-4 things to consider for your mortgage payment. The principal is important – which means the repayment of your outstanding balance. Another factor is the interest – this is the payment of interest charged on your outstanding balance. Another factor is taxes – 1/12 of your expected annual property taxes are included in your mortgage payment and deposited into your escrow account.
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