Buying a home may seem complicated and stressful, but it doesn’t have to be.
We’ll give you everything you need to know so you can feel confident about buying a home, and what to expect every step of the way.
Whether you’re looking to buy a home right now or home buying is part of your future, use this kit to make the process as simple as possible.
I/we also authorize Churchill Mortgage Corporation, The Churchill Agency and/or their Preferred Provider for our area to contact us regarding but not limited to mortgage and insurance services and products via telephone, mobile phone (including through automated dialing), and/or email, even if telephone numbers or email I/we provide are on any Do Not Call/Contact Registry, such as corporate, state, or the National Do Not Call Registry. The submission of this form does not constitute in any way a formal loan application or a commitment for a loan. By communicating with us by phone, you consent to calls being recorded and monitored. By participating, you consent to receive text messages sent by an automatic telephone dialing system. Consent to these terms is not a condition of purchase.
When buying a home, you’ll likely have a lot of questions. The first thing you should do is find out how much house you can afford. We provide an easy-to-use calculator using your monthly income with your projected loan term. Once you know your estimated home affordability, you can start building your personalized home buying team.
It can be a struggle to figure out your initial home buying budget but it’s best to have an overall game plan once you start thinking about purchasing a home. Get a head start and become a home buying budget boss:
The most important part of understanding the mortgage process is finding a lender who understands you and your home loan goals (like saving time and money). Some parts of the process can be taken care of now while other parts will occur after you’ve picked out your home. Here’s a quick and easy view of the home loan process:
First, submit your mortgage application. This lays the groundwork for your Home Loan Specialist to be able to give you accurate interest rate quotes and down payment options.
By becoming certified with Churchill, you will get a pre-approval with upfront underwriting. This means you’ll know exactly how much you can afford without any surprises down the road. You’ll get into your new home quicker and with less stress.
After your application is completed, you’ll start getting your home inspection and appraisal under wraps. This is when you’ll be asked for any additional documentation to close your loan, if you haven’t already provided it.
Your home loan will go through underwriting (remember, it has already been through underwriting at the beginning of your loan process if you became a Certified Home Buyer). This just verifies all conditions on your home loan are approved and then you’ll be issued a “clear to close.”
The underwriter will issue your final approval, process your closing paperwork, and schedule your closing date and time. On your official closing day, you’ll have a lot of documents to sign but in the end your loan will be funded, and you’ll get the keys to your new home.
This is the most common loan option and meets the needs of most people. Due to lack of government backing, they do require better credit to qualify. The overall cost is typically lower than most comparable government-backed loans.
Principal and interest payments won’t change for the life of loan, you can pay off your mortgage at any time without penalties, you can typically avoid Private Mortgage Insurance (PMI) with a 20% or higher down payment, and primary homes can be purchased with 3% down.
You’ll need a credit score of at least 620 and a debt-to-income ratio no higher than 50% (and lower so you can get better loan terms).
If you don’t qualify for a conventional loan, take a deeper look at this option. These loans are backed by the government and have a lower down payment requirement, credit score threshold, and income qualification. It might fit what you need!
Easier to qualify, primary homes can be purchased with 3.5% down, fixed rates are available, and down payment assistance programming is available. You also only need a small amount of cash to close on your home.
You will pay a Mortgage Insurance Premium (MIP) for a minimum of 11 years or it can be paid for the life of the loan, depending on your situation.
If you or your spouse has served in the U.S. military you’ll want to look at this option because it’s a great loan product that’s an earned benefit offered to all active duty and retired military personnel.
This loan is designed for rural borrowers, making it ideal for those who may not be able to get conventional financing. It’s managed by the Rural Housing Service and offers flexible credit criteria.
If you have been working hard to pay off your debt and no longer have a credit score as a result of this, a no score loan might be a good option for you. You will go through a manual underwriting process to get this non-traditional mortgage.
Jumbo loans (also known as non-conforming loans) are privately-backed mortgages that usually require a larger down payment, higher credit scores, and higher income levels from borrowers.
Looking for answers to your questions about mortgages? We’ve got you covered. Learn more about pre-approvals, interest rates, loan terms, and more.
A: A down payment is the cash you pay upfront to get a mortgage. It’s deducted from the total amount of your home loan. To figure out how much of a down payment you need, start with the type of loan you are trying to get. For example, you can get a conventional loan with as little as 3% down, an FHA loan with 3.5% down, and a VA or USDA with no money down. The more money you put down for a down payment, the less your monthly mortgage payment will be. We recommend you speak to a Churchill Mortgage Home Loan Specialist to help you with your unique situation.
A: Closing costs are the charges you are required to pay before your mortgage is completed and fully funded. Typically, home buyers will pay anywhere between 2% and 5% of the loan amount in closing fees. For example, if your home costs $250,000, you could pay anywhere between $5,000 and $12,500 in closing costs. You will receive your closing costs from your Home Loan Specialist in a Loan Estimate that you will receive after you apply for your home loan and in the Closing Disclosure document that is provided before your official closing day.
A: It is possible to get a conventional mortgage with a credit score as low as 620 and an FHA loan with a credit score of at least 580. However, be aware that the lower your score, the higher your interest rate will be. Churchill Mortgage also offers zero credit score loans which means if you have paid off all your debt and have a credit score of zero, we can still provide a home loan to you and provide you with guidance on how to pay off your home as soon as possible. Click here to find out more information about no score loans and how we can help.
A: Depending on your situation, there are typically three or four parts that roll into your monthly mortgage payment:
A: Yes! This is a common misconception that you cannot get a mortgage if you are self-employed (or that it’s more difficult). You will need to provide evidence of an active income (i.e. the money you earn for your work). You may also be asked to provide documentation proving the stability of your business.
A: The majority of home loans today are fixed rate. Only about 3% of home buyers are choosing to go with an adjustable-rate mortgage (ARM). An adjustable-rate mortgage can be risky because your interest rate will fluctuate over time which means your monthly payment will also go up and down. Many ARMS will start at a lower interest rate compared to a fixed-rate mortgage, but will then go up to a much higher interest rate. Talk with a Churchill Home Loan Specialist about which home loan is best for you.
A: When you cap your interest rate it means you are guaranteed today’s mortgage interest rate for up to 90 days through the Churchill Rate Secured program. You’ll be able to protect yourself from fluctuating interest rates by locking or capping your rate. So, if you’re thinking about buying a home in the next three months it’s best to secure a low interest rate to save you money. If you don’t find a home in that initial 90-day period, you can reset your rate for another three months. Click here for more information.
A: Mortgage points are also known as discount points. They are basically prepaid interest on your home loan. In other words, points let you make a trade off between what you pay upfront at closing versus what you pay monthly later. It’s not always beneficial to “buy down” your interest rate. In fact, you could lose money. Each point is equivalent to 1% of your total loan amount. For example, on a $200,000 mortgage, one point would cost you $2,000 directly out of your pocket. This money is in addition to your down payment and adds to your total closing costs. A one-point discount does not necessarily equal a 1% lower interest rate. Click here for more information about seeing if points are worth the cost or speak to a Home Loan Specialist today.
A: This depends. A 15-year loan term usually comes with a better interest rate compared to a 30-year loan term. You will pay off your home quicker with a 15-year mortgage and will save a large amount of interest. On the other hand, a 30-year term will cost less per month.
A: You will be asked to provide many different documents including but not limited to: Income verification (such as the last two years’ tax returns, W-2s, 1099s, pay stubs, etc.), driver’s license and social security card, bank statements, proof of funds to close, etc.
A: Any loan officer or lender can say you are “pre-qualified.” A pre-qualification is based on information you provide. It is not a verification of your income and assets. While this may seem like the quickest and easiest option, you’re not actually approved for financing. This can be a big problem if you’ve invested weeks or even months of your time and effort looking for the right home and it’s sold from underneath you while you’re trying to get your loan approved.
A: A standard pre-approval takes a little more time than a pre-qualification since you’ll need to submit financial documents to your lender for review. A standard pre-approval can help you determine how much you can afford before you start looking for a house doesn’t mean a mortgage underwriter has reviewed your file, resulting in a less reliable approval.
A: This is the best option if you’re looking to buy a home, especially when the competition is high. When you become a Certified Home Buyer, you are submitting your financial documents to be reviewed by an actual underwriter. You can be conditionally approved for financing on a new home without a property address. You’ll do a bulk of the leg work up front which makes the home buying process quick and seamless once you’ve found your dream home. This will give both you and the seller of the home peace of mind that your funds will be approved when it’s time to sign on the dotted line.
A: Many mortgage lenders hold money that you’ve paid in an escrow account to pay your property taxes, homeowner’s insurance, and in some instances even your homeowner’s association (HOA) fees. This makes it as easy as possible so you only have to make one mortgage payment a month and you don’t have to think about ongoing annual payments for your insurance and property taxes. Your lender will calculate how much your property taxes and homeowner’s insurance premiums are for the entire year, and then divides them by 12 (one payment per month). You’ll then pay that amount each month along with your standard mortgage payment, and in return, your lender will manage the escrow account and submit payments for your property taxes and homeowner’s insurance when they are due. In some states such as Hawaii and California, escrow is referred to as impounds. Click here to learn more.