Good Day NWA: Home Buying in 2020 with Rock Mortgage

Good Day NWA

It’s a new year and many of us are working on self improvement as a way to start the new year on a positive note. Financial independence is one way many can improve their lives in 2020. Instead of throwing money away on rent every month, many invest in a home to build wealth and strengthen their overall financial picture. Here to give the five most important tips you need to know when achieving your goal of homeownership in 2020 is Chad Hartsfield, branch manager at Rock Mortgage.

QUESTION​: When you begin to plan for homeownership, what should homebuyers consider?

ANSWER: Yes! My second tip is to get your credit in shape. Although there are loan programs for those with lower credit scores, there is a cost associated with them in the form of a higher interest rate. If you need to improve your credit score, satisfy any outstanding debts that have been turned into collection bureaus. Another good way of raising your credit score is by paying off at least 50% of your total credit card debit. So if your credit card has a total credit limit of $4,000 and a $4,000 balance, try to pay it off or pay it down to at least $2,000. It’s always better to have 2 credit cards with 50% balances as opposed to one with a high balance. Ideally, you pay it off and don’t carry the credit card debt. The main reason for raising your credit score is to get a better interest rate. The lower the interest rate, the less you’ll pay each month and over the life of the loan. Another option to consider are loans that have lower to no credit-score requirements.Those include FHA and VA loans. FHA loans are backed by the government and issued by the Federal Housing Administration. They are popular with first-time homebuyers. VA loans are available to regular military, veterans, reservists, National Guard or spouses of military members who died while on active duty.

QUESTION: Does your credit score affect your ability to purchase a home?

ANSWER: Yes! My second tip is to get your credit in shape. Although there are loan programs for those with lower credit scores, there is a cost associated with them in the form of a higher interest rate. If you need to improve your credit score, satisfy any outstanding debts that have been turned into collection bureaus. Another good way of raising your credit score is by paying off at least 50% of your total credit card debit. So if your credit card has a total credit limit of $4,000 and a $4,000 balance, try to pay it off or pay itdown to at least $2,000. It’s always better to have 2 credit cards with 50% balances as opposed to one with a high balance. Ideally, you pay it off and don’t carry the credit card debt. The main reason for raising your credit score is to get a better interest rate. The lower the interest rate, the less you’ll pay each month and over the life of the loan. Another option to consider are loans that have lower to no credit-score requirements.Those include FHA and VA loans. FHA loans are backed by the government and issued by the Federal Housing Administration. They are popular with first-time homebuyers. VA loans are available to regular military, veterans, reservists, National Guard or spouses of military members who died while on active duty.

QUESTION: What other tips do you have for people thinking about purchasing a home in 2020?

ANSWER: My third tip is to think about your down payment. There is a big myth out there that you need 20% to put down on your house. In fact, the median down payment is 7%. If your goal is to put money down on the house, start saving for your down payment. If that is not possible, don’t worry! There are many loan types that have low or no down payments. A USDA Rural Housing loan offers 100% financing. Many people hear “rural” and think you will be in the country, but, in fact, many places in Northwest Arkansas even qualify, so it is worth checking out. VA loans also offer 100% financing. The FHA loan we mentioned is an example of a low down payment loan, with only 3.5% required down. A great, relatively new option is​ the Home Ready mortgage, which only requires3% down. Home Ready loans are great for multigenerational families living under one roof, because everyone living in the home can be used to get approved.

QUESTION: There are many different mortgage types out there, it seems. What is the best way for home buyers to find the right fit for them?

ANSWER: There’s a mortgage type for all types of buyers. If you have a lower credit score and little to no cash to put down, we can figure out the right mortgage type for you. From the VA loans to the FHA loans, Home Ready and the USDA loans, there are many different loan types out there. Learn what type of loan is best for you by going to a trusted mortgage lender, ask questions, and find out which loan type best suits your life experiences, financial picture and goals.

QUESTION: Are there any other tips you have for homebuyers?

ANSWER: Yes, my fifth and final tip is to get pre-qualified. Once you get pre-qualified you will know exactly what you can afford. Your mortgage lender can guide you through this process. Assemble your work history, income, debt, assets and credit profile. Once you are pre-approved, you will receive a loan estimate. Being pre-qualified carries a lot of weight when you are looking for a house, because it is an indication that you are a serious buyer.

QUESTION: If someone is interested in starting the process, where should they turn?

ANSWER: The best place to start is with a trusted mortgage lender. They will have the resources and knowledge needed to guide you through the process. I encourage folks to visit our website at ​www.rockmortgagelending.com​ and contact us so one of our qualified lenders can help.

For more information, visit ​www.rockmortgage.com​ or call 479.321.3355

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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