Q. Is 20% of the price of a new home required as a down payment?
A. There is no set amount that you must put down. You might be surprised to learn that many first-time home buyer programs require as little as 3% down*. In the past, mortgage lenders most often did require a 20% down payment. But in the last ten years, we’ve seen the introduction of many loan programs designed to help more people buy homes. As a result, mortgage loans can now be tailored to fit each home buyer’s needs and financial resources.

*For down payments of less that 20%, mortgage insurance (MI) will be required and associated costs will apply.
(top)

Q. Do mortgage lenders lend money to young people?
A. 50% or more of new home mortgages are made to people under 35. Many prospective home owners worry that they must fit a particular profile in order to qualify for a loan. They worry that they’re not the right age, that they don’t have the right education or the right job, that they don’t speak the right language. The fact is, among all the things that mortgage lenders look at, the most important - whether you’re 27 or 75 – are these: what is your income compared to the debt you’re currently carrying, what is your credit history, and how much do you have in savings.
(top)

Q. Are monthly home payments more expensive than rent?
A. In many cases, mortgage payments can be even less than rent payments. Use our Rent or Buy calculator to see if renting or buying makes the most financial sense for you.
(top)

Q. Is there a minimum income level to qualify for a mortgage?
A. There is no set minimum income requirement for mortgage qualification. However, just as average home costs differ by geographic area, so does the average income level needed to support monthly mortgage payments. Fortunately, it’s not hard to take the guesswork out of knowing whether you can qualify. Before you even start looking for a house, try out the What Can I Afford calculator, then talk to a mortgage specialist. He or she can help you determine how much mortgage you may quality for.
(top)

Q. Will one late credit card payment or loan default disqualify me from getting a mortgage?
A. If you have less than perfect credit, Peninsula Mortgage has programs to meet your needs. Late payments (especially those under 30 days) should by no means automatically disqualify you from getting a mortgage loan. Almost everyone at one time or another has forgotten to pay a bill on time, or has had trouble making a payment – mortgage lenders know this. Many people find themselves in difficult financial situations, often because of illness, divorce, or temporary unemployment.

If you can demonstrate that the problem is in the past, and you have been able to re-establish a good track record for a sufficient amount of time, you may be in a good position to get a mortgage loan. There may be a reasonable explanation, so speak to your broker honestly and openly about the situation. It’s important to remember that lenders don’t just look at you past history, but also at your ability and willingness to pay in the future.

Sometimes, though, you may not be in a position to buy a house today. To do so would only compound your problems. But if you don’t qualify for the loan you want today, work with your broker to address the things that may have kept your loan from being approved. That way, in 3 months, or 6 months, you may be ready to buy your home.
(top)

Q. What type of insurance do I need prior to closing?
A. You will need proof of homeowners and title insurance prior to closing.
(top)