For many Americans, taking out a mortgage is still the easiest and most practical path to homeownership. However, the process of securing this type of loan can be confusing, especially for first-time homebuyers.
Nevertheless, getting a mortgage is very achievable when you have a firm understanding of the basic concepts. To help you with this process, listed below are answers to some frequently asked questions about taking out a mortgage loan.
Some people think that an average credit score will not be good enough to be granted a mortgage. This, however, isn’t necessarily true. You can get a mortgage with a FICO score as low as 620.
It’s important to remember, however, that a great credit score isn’t required, but it will certainly help. The higher your credit score, the lower your interest rates will be.
A home appraisal is conducted to determine the actual value of a property that you’re eyeing. The valuation from the appraisal could be different from the asking price of the property’s seller.
A professionally-conducted appraisal is needed to let lenders know that the property you’re buying is worth what you’re asking to borrow. This process is important to banks as the property will become a collateral for your loan.
The answer to this depends on your financial capability and preference. If you’d rather play it safe, a fixed-rate term is right for you. But if you are willing to take a gamble that your payment could decrease over a period of time, you should opt for an adjustable-term mortgage loan.
Much like a down payment, discount points are money that you can pay up front in order to secure lower interest rates on your mortgage. Discount points are tax-deductible, meaning a property buyer can save in the long term by obtaining them.
Are you planning to take out a mortgage to buy a property in Missouri? Look no further than Table Rock Community Bank. With our help, we can help you secure a mortgage or a business loan. Visit our branches in Branson West and Kimberling City.