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Taking out a mortgage loan can make your dreams of homeownership a reality, but it can be an intimidating process filled with technical jargon and figures. This is why many first-time buyers become confused about how to approach this process. Knowing what to expect before you begin can reduce the stress of applying, increase your chances of success, and may save thousands of dollars over the life of the loan. If you’re buying your first house, below are answers to some common questions many people have about mortgages.

Commonly Asked Questions About Mortgage Loans

Can I get a mortgage loan without perfect credit?

While a high credit score does make getting a loan easier, most lenders don’t require a perfect rating. However, lower scores typically translate to higher interest rates, so getting a copy of your report and paying down some debts before applying could dramatically reduce the overall cost of your home.

What documentation will I need?

mortgage loan Before approving your mortgage, lenders will usually want to see proof of employment, W-2s, 1099s, or other proof of income. They will also want to see your most recent bank statements, your previous years’ tax returns, and a list of all your assets. You should also include a comprehensive list of your debts and proof that you have the down payment ready.

How much should I put down?

The higher your down payment, the less you’ll have to borrow, so it’s a smart idea to save up as much as possible. Most traditional lenders prefer borrowers to put down at least 20%, although FHA loans and other programs allow you to buy a house with down payments as low as 3.5%.

Should I get pre-approved before house hunting?

Lining up a mortgage loan is often one of the most stressful parts of buying a house, so many people prefer to get it out of the way first. Sellers may also give more weight to offers backed by a pre-approval letter, so doing the paperwork first can make the entire process easier.


 

As a local neighborhood financial institution, Putnam 1st Mercantile Bank understands the needs of Cookeville, TN, homebuyers. All of their mortgage loan decisions are made locally by professionals who are committed to giving you the personal attention you deserve. Visit their website for an overview of their loan services or call (931) 528-6372 to make an appointment with a loan officer today.

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