As a home buyer I am sure you have tons of questions you would like to ask a lender before starting the process of getting a pre-approval to purchase a home. I took some of the questions I am asked the most and asked our lender partner, Theresa Leslie with Interlinc Mortgage to answer them to help you understand the process a little better. If you have additional questions please reach out to her and she would love to walk you through the process. Theresa Leslie – or 256-337-9636

1. What kind of credit score do I need to have to buy a house?  With the new changes in the mortgage industry, FHA will now allow credit scores as low as 580 to allow financing.  FHA will give the underwriter the authority to ignore medical collections on the credit report.

2. I don’t have tons of money saved up for a downpayment so I am not sure I can buy? There are several zero down programs available such as USDA Rural Housing, VA and CONV Step Up.  There are also down payment assistance grants that could be used for new home purchases, but only for primary residence purchases.

3. My lease is up in two months so do I even have enough time to buy a house? Yes, once you ratify on a purchase contract, the turn time with Interlinc Mortgage Services to close your home is 35 days, in most cases.

4. What kind of documents should I have to get a pre-approval? Initially for the pre-approval, we do not need any documentation from you but a complete loan application which can be done via my website, over the telephone or in person, whichever works best for the client.

5. Will I have a better interest rate on new construction? To the lock in the interest rate on new construction financing has a slightly higher interest rate while the house is being built because you’re locking for an extended amount of time such 6 months, 7 months etc. instead of the standard 35 day lock,   but you will have an option to float the rate down on new construction once before you close on your new home.

6. What is PMI and do I have to have it? PMI is Private Mortgage Insurance which is required on CONV financing whenever a customer does not put down a down payment of 20% of the Purchase Price.  The PMI is part of the monthly mortgage payment until the borrower acquire 20% equity on the home.  There are work arounds to avoid PMI, but it will require that you have excellent credit scores.  On an FHA loan, it’s called MIP which is Mortgage Insurance Premium and there is no work around on FHA financing and it is required for the life of the loan.  There is no PMI or MIP on VA financing.


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