The Mortgage Process
It's a good idea to get pre-approved for a mortgage before you start shopping for properties to buy, unless you intend to pay cash for a home. You must go through the mortgage pre-approval process in order to submit an offer on a house since you will require a pre-approval letter from a lender.
1. How much down payment is required for a property and how do different down payments affect your interest rate and any required private mortgage insurance (Mortgage Insurance.)
2. What would the projected monthly payments for properties with various prices look like?
3. What impact do various down payments for a given price point have on your monthly payment?
Answering these questions helps you determine your price range and gets us off to a great start on your search.
Please let us know if you'd like a recommendation for an excellent lender!
We advise the following when seeking for a lender:
If you’re hesitant to speak with a lender now, you can get started on your own by taking the following steps:
Check Your Rating
Visit CreditKarma.com to check your credit rating. With some exclusions for FHA & VA financing, you'll typically need at least a 660 to qualify. The better your credit score, the better rate the bank will offer you. The best rate is available for those with credit scores of
Mortgage Calculator Online
Use an app on your phone or a mortgage calculator online. Ensure that it determines your total monthly payment, known as Principal, Interest, Taxes and Insurance (PITI). Texas has greater property taxes than most calculators would include in, so keep that in mind. We advise utilizing the Quicken Loans app and Karl's Mortgage Calculator for Android (though we strongly recommend against using Quicken Loans.)
Calculate Your Debt
Do the math to get your debt-to-income ratio (DTI), which is the sum of all your monthly debt obligations (student loans, minimum credit card payments, auto loans, etc.) divided by your monthly pre-tax income. You will receive approval from your lender for a DTI of about 50%, so you can increase your PITI to estimate how much you will be able to borrow.
