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Mortgage Information for New Buyers
Today I have Howard Doak with me from Cityscape Home Mortgage in Tulsa and he is going to be speaking with us about buying a home.
What are some options for first-time home buyers or people who can put down a limited down payment?
Currently, there are three different programs that make it easy for first-time buyers to purchase. There is the newer Rural Development loan, the VA loan, and there is also bond money (which is limited right now).
What advice would you give to buyers in the Tulsa market right now?
The #1 thing that I would tell all of my clients is to contact their lender before they take any steps towards buying a home. Talking with your lender before a transaction can decrease the amount of paperwork needed if money is gifted towards a down payment, and it also helps your lender predict what actions might be necessary later down the road. I would also suggest that people keep ALL of their financial paperwork. This includes bank statements, paychecks, etc. New home buyers get frustrated when their lender keeps asking them for the same documents over and over again, but it is all part of the process.
The burning question that I hear all the time is what is mortgage insurance?
Mortgage insurance is an insurance policy that is taken out to protect the lender in case of a default on the loan. A policy like this will occur most frequently when less than a 20% down payment is put towards a home. Monthly mortgage insurance payments will vary depending on the credit score, the down payment, and the type of loan.
How to avoid mortgage insurance:
If you want to avoid paying mortgage insurance, then put a large down payment towards your house (upwards of 20%). If you don't have a large amount to put down, we can do a combo loan, where I do a first and a second mortgage to avoid mortgage insurance. You can also buy out mortgage insurance with a one-time fee. There are also programs that have limited mortgage insurance.
Mortgage insurance will automatically drop off when you reach 78% loan-to-value. You can request that the insurance be dropped at 80%, but you will need approval from your lender.
If you would like to contact Howard with any questions, you can reach him at 918 622 0900 or visit his website.
As always, contact me if you're looking to buy, sell or invest in Tulsa real estate. I look forward to speaking with you soon.
