Mortgage Pre-Qualification

A photo of happy expecting couple using digital tablet on sofa. Loving young partners surfing internet at home. Both are wearing casuals in brightly lit room.

Getting a mortgage pre-qualification is important in today’s competitive market. It’s almost a necessity when you’re ready to place a serious offer on a house. For most homebuyers, this is the first step in the home buying process.

Why should I get pre-qualified?

Pre-qualification letters show the amount you’ve been pre-qualified for and are based on your current credit history, income, assets and debt. However, pre-qualifications do not go through a full underwriting review by the lender, so it’s not a commitment to provide you a home loan. 

What information do I need to provide to get pre-qualified?

Since your lender will need to review your financial situation, you’ll need to provide some information and documentation. You could be asked for:

  • Social Security Number
  • Employment history (minimum of 2 years)
  • 2 most recent paystubs (to verify proof of income)
  • Tax documents
  • Bank account information (account numbers, statements)

Is there something that could make my offer more competitive?

A pre-qualification is a great way to show sellers that you are serious about your offer. The HUNT Mortgage Pre-Purchase Commitment Program is an even better way. The HUNT Mortgage Pre-Purchase Commitment Program delivers a fully underwritten commitment, subject only to collateral conditions and to reassure sellers, HUNT Mortgage backs its commitment with a $1,000 guarantee*. If a buyer does not close on a transaction due to the buyer’s mortgage application failing, we will pay the seller $1,000. The guarantee distinguishes HUNT customers from other buyers a seller may be considering.

Contact HUNT Mortgage (link to contact page) or call 888.433.8373 to discover how you can apply for your own no-cost, no-obligation Pre-Purchase Commitment that gives you a competitive advantage when you shop for a home. By getting a commitment for your financing upfront, you can truly enjoy the process of shopping for your dream home.

Disclaimer: *The guaranty is null and void if:  a) The property is not deemed acceptable collateral for the loan due to value and or condition; b) The buyer or seller willfully cancels the transaction; c) The buyer voluntarily terminates employment and or voluntarily divests assets prior to closing; d) The buyer takes out new credit after the Pre-Purchase Commitment is issued; e) The seller is unable to deliver clear acceptable title;  f) Guaranty is only on owner occupied single family transactions; g) The transaction does not close due to a contract contingency not being met other than the mortgage financing; h) Pre-Purchase Commitment was issued with maximum specific sale price and taxes, guaranty is void if either of these are exceeded; i) The contract closing is dated past the expiration of the Pre-Purchase Commitment. Guaranty is only on Pre-Purchase Commitments issued by HUNT Mortgage

Stop Stressing: You Don’t Need a 20% Down Payment to Buy a Home

glass jar tipped over with pennies, nickels, dimes, and quarters spilling out

Many Americans may be unnecessarily talking themselves out of homeownership. Thirty-seven percent of nonhomeowners say not having enough saved for a down payment is holding them back from homeownership, but 62% of Americans incorrectly believe you have to have at least 20% of a home’s purchase price to buy, according to NerdWallet’s 2020 Home Buyer Report.

“These days, you don’t need to put a full 20% down on a home,” says NerdWallet home and mortgage expert Holden Lewis. “Lenders offer mortgages with far less — as little as 3% down — which allows far more people to get into homeownership sooner.”

So, how do you know just how much you need to save up based on your specific goals? It requires a little strategizing.

Before you can zero in on a down payment target, you have to determine how much home you can afford and when you’d like to start home shopping. First, set your homebuying budget with a home affordability calculator to get estimated monthly payments based on various home prices, down payment amounts and locations.

Then, set an approximate timeline. Maybe you’re planning a wedding and know you won’t be ready to purchase for at least two years, or you’re just starting a graduate program and want to give yourself five years to find employment and settle down after graduation. Be realistic and account for your life circumstances.

With a homebuying budget and estimated timeline, you can start running numbers to set a down payment savings goal.

1. Is saving 20% by your goal date realistic?

Calculate 20% of that homebuying budget and determine if it’s feasible to stash that amount away in the time you’ve allotted.

If the answer is yes, great! A big down payment doesn’t only lower monthly payments, it can save you thousands of dollars in interest over the life of the loan and eliminate the need to pay private mortgage insurance.

If it’s no, you have two options: Revisit your goal parameters — opting for a less expensive home or pushing out your target date — or consider a smaller down payment.

Example: For a $250,000 home, someone starting with $0 saved would need to save about $1,400 each month to reach a 20% down payment in three years. For most folks, that’s a stretch. Adjusting the timeline to five years would require monthly savings of about $800. While that may be more realistic, a smaller down payment could get you in a home sooner and with less stress to your monthly household budget.

2. How much can you save by your deadline?

What’s the most you can save monthly for your down payment goal? If you don’t already know the answer, create a monthly household budget to help figure out where your money is going and how much you can set aside.

At a high level, allocating 50% of your post-tax income toward your needs, 30% toward your wants, and 20% toward savings (including your down payment) and debt repayment is a sustainable approach. But by accounting for all of your income and spending, you may realize you can sacrifice a little of your dining out and entertainment money (wants) temporarily to make homeownership a reality sooner.

Example: You decide you can set aside $350 each month. If you’re still hoping to start home shopping in three years, this would leave you with $12,600, or a 5% down payment. Because many lenders accept down payments of 5%, and even lower, you’ll be in a good place to buy around your three-year target date.

3. Do you qualify for down payment assistance?

Even setting aside $12,000 in three years can seem out of reach for some people, but all hope is not lost. First-time home buyers, or those who haven’t owned a home for the past three years, may qualify for down payment assistance, a grant or loan to cover some or all down payment costs. And in some cases, repeat buyers may qualify.Such programs can both shorten the path to homeownership and free existing savings for closing costs, moving or other homebuying expenses.

Weighing the trade-offs of a high vs. low down payment

A down payment doesn’t have to stand in the way of homeownership. Smaller down payments and down payment assistance programs can help you achieve your homebuying dreams more quickly and leave you some savings for an emergency fund or unexpected repairs.

It’s worth considering, too, since there’s no guarantee your $250,000 homebuying budget will get you the same type of property in three years as it would if you bought sooner. Home prices have been rising, but what will happen in the future and what it could mean for your down payment target is hard to know.On the other hand, a bigger down payment can equate to a better interest rate on your loan, lower monthly payment, more equity in your home right away, and not paying monthly for mortgage insurance. Because you’re borrowing less money, you’ll pay less in interest over the life of your loan and have lower monthly payments.

How much of a down payment you need is ultimately a personal decision, a balancing act between financial factors and how quickly you want to achieve your dream of homeownership.

More From NerdWallet

Elizabeth Renter is a writer at NerdWallet. Email: Twitter: @elizabethrenter.

The article Stop Stressing: You Don’t Need a 20% Down Payment to Buy a Home originally appeared on NerdWallet.

First-Time Homebuyers: Don’t Make These Mistakes!

Have you heard? January is the new April! The spring market is kicking off unusually early this year, so if you’re a first-time home buyer you may be starting the home buying process earlier than expected. If you’re ready to start your house HUNT, here are a few common first-time homebuyer mistakes to avoid:

Looking outside of your price range.

man signing paperwork on a table

When you view homes online, it can be tempting to look at all the homes available without a price range in mind. But if you look at homes that are unattainable, you could fall in love with a home that you can’t afford. Think you can afford to stretch your budget to the max? Consider that while you may think you’re just spending an extra $10K, “…you’re paying an extra $10,000 plus interest (” Carefully consider how much you can stretch your budget before you start looking so you don’t end up in a home you can’t afford.

Skipping your neighborhood research

blue front porch with seating

You’ll want to do some research on the neighborhoods you are looking at. Look into the neighborhood, and ask yourself important questions like:

  • What can of development plans are in the works? 
  • What are the zoning laws? If there is a lot of open land, what could be built on it?
  • Have home values in the area been on the rise or decline?
  • Is this a safe neighborhood during the day and night? (drive around at different times of the day)
  • Is this home on a main street? Will it get a lot of traffic? 

Getting caught in a bidding war

Couple with smart phone smiling

You find a house you love. The problem? So do 5 other people. While it can be easy to get into a bidding war, you may end up offering significantly more than a home is worth. This can become a major problem for anyone financing their home purchase. If you’re relying on a mortgage and the bank doesn’t appraise the house at or above the amount you offered, you may be coughing up a lot more money. And the worst-case scenario: your deal may fall through.

Make sure you know what the home is worth and how much you can afford before entering a bidding war. Your agent can be a great asset to inform you about the home’s value so you know when you should stay and when you should walk away.

Skipping out on an agent

Using a real estate agent to assist you in your home buying process is a great idea. In fact, 89% of homebuyers in 2019 said they used a real estate agent for their home buying transaction.

We always suggest that you do your research to find an agent or team to assist you. You want to be deliberate with your agent choice because your success or failure could depend on them. They handle a large portion of your home buying process. Don’t ever work with an agent that does not fit your needs. Make a list of recommended agents and look them up online. See what previous customers have said, what areas they specialize in, and what they can offer you. 

With the right agent to guide you, you can attack this “early” spring market with ease! Contact a HUNT Real Estate Sales Professional today if you’re ready to start your House HUNT.

Please Don’t Leave Your Shoes On and 4 Other Open House Don’ts

When you attend an open house, you want to look around and get as much information about the home as you can. But it’s important to remember that you are a guest in someone’s house, so please be respectful. If you’ve never attended an open house before, here are a few don’ts to avoid. 

DON’T forget to take off your shoes. Most homeowners will ask that you take your shoes off before entering their home. There is traditionally a sign at the entrance requesting you do so. If they allow you to keep your shoes on, make sure you use the doormat to wipe off any dirt you could track into the home.

DON’T wait until the last minute. Make sure you have enough time to view the entire home. Don’t wait until 5 minutes before the end of the open house to come in. 

DON’T open closed doors without permission. If doors in the home are closed, check with the listing agent before you open them.

DON’T go through people’s personal items. Everything you need to see about the home will be visible, so there’s no need to go through other people’s property. Do not rifle through drawers, closets, or medicine cabinets.

DON’T be afraid to ask questions. The listing agent is there to answer any questions, so use them as a resource when questions arise.

Ready to check out some great open houses? Check out all the great open houses that are happening during our final Twilight Open House Tour event of the summer! Check out all the great homes that will be open on Wednesday, August 14th from 5-7PM. 

Searching For Your New Home? Figure Out Your Home Wants Vs. Needs

When you’re ready to shop for your first home, it’s important to understand what you’re looking for in your new home. But how do you determine the difference between a want and a need?

Needs vs wants

A need in your future home refers to anything that is an absolute requirement. They are items or features without which you could not live in the home. Needs are items that are difficult or impossible to change.

A want can be defined as anything that you can fix or anything that would not impact your decision to buy. Wants are things that you could live without or can add later after you move in.

It’s important when you’re looking at your list of wants vs. needs to consider your budget. There may be certain wants and needs that may not fit in your budget. Your real estate sales expert will walk you through what features and locations fit into your price range.

Determining Needs vs Wants

It is important to determine your wants and needs before you start your home search. Here are a few questions that should help you determine your wants and needs list:

It is important to determine your wants and needs before you start your home search. Here are a few questions that should help you determine your wants and needs list:

Are there any location-specific restrictions?

If you need to stay in a school district or town/city/county, make sure this is at the top of your “need” list.

What do I like about my current house/apartment? What do I dislike?

Is your current home too large or too small? Do you love your outdoor space or is it too much for you to maintain? Ask yourself the likes and dislikes of your current living situation to shed light on what features you should search for in your new home.

How long do I plan on staying in this home?

Are you planning to stay in your new home for 5 years or 15? While we can’t always determine what the future will bring, consider the length you wish to stay in this home. For example, if you’re planning on children, you may want more bedrooms. If your children are moving out, you may want a smaller space.

What features am I looking for?

Review all features in a home that are not changeable, such as square footage or bathrooms, and move those items to your wants list. You can install other features like granite countertops and stainless steel appliances after you move in.

What is my budget?

Your budget can also impact your wants and needs. You may want 5 bedrooms, but find that your budget only allows for homes with 4 bedrooms. Your real estate sales professional can inform you about the cost of homes in your desired area.

Once you’ve determined your wants and needs, your real estate sales professional will be able to assist you in finding your next home. Reach out to one of our knowledgeable sales professionals today to start your home buying process.

4 Open House Questions Answered for Home Buyers

There are a large number of articles out there that discuss what to do as a home seller during an open house. But what if you’re a buyer walking through your first open house? Make sure you review our FAQ before you go to your first open house.

Q: Is the agent showing the house always the listing agent?

A: Sometimes, but not always. The easiest way to find out if the agent holding the open house is the listing agent is to ask. Sometimes, agents hold an open house on behalf of another agent or is a member of the listing agent’s team.

Q: Should I ask if the agent any questions?

A: You should always feel free to ask the agent any questions about the home you’re viewing. Feel free to ask them questions about the home, neighborhood, and schools.

Q: How many homes should I look at before I make an offer?

A: There is no right or wrong number of homes to look at! You could look at 5 homes or 25 homes. Each homebuyer’s experience is difference. Your real estate professionals expertise can help you make an informed decision on what home to place an offer on.

Q: Should I take my shoes off before entering an open house?

A: Most homeowners appreciate when you remove your shoes before entering their home. Remember to be polite and respectful of someone else’s home. Most agents will have a sign at the door but even if they don’t, it’s just good manners.

Still have questions about what to do as a buyer at an open house? Be sure to check out our other blogs on attending an open house as a buyer:

5 Questions to Ask at Your Next Open House

How to Make the Most Out of an Open House as a Buyer

Are you ready to find your dream home? Don’t miss out on our Twilight Open House Tour happening July 10th from 5-7PM!

5 Questions to Ask At Your Next Open House

Red white and blue Open House Flag

Are you ready to attend an open house? Here are a few questions you should be asking the listing agent while you’re at an open house:

  1. How long has this house been on the market? It’s always good to know if a home is new to the market or has been sitting for a while. It can help inform your agent for negotiations.
  2. Why are the sellers moving? This can offer some insight into the home. Knowing why someone is choosing to sell could be helpful for both you and your agent.
  3. What (if any) updates have been made to the home? This can be important for you as the home buyer to inspect the work. They should be able to provide any permits for those updates (if required).
  4. What is the neighborhood like? The listing agent should be able to give you an overview of the neighborhood and what it’s like.
  5. Are there any offers on the home? If there are offers already in on the home, you’ll have to decide (and quick) if this is a home you’re interested in.

Asking a few questions can give you useful information to determine if a home is right for you.

Interested in checking out some homes in the evening? Don’t miss our Twilight Open House Tours happening Wednesdays this summer. Our next Twilight Open House event is happening Wednesday, June 19 from 5-7PM. Check out all the open houses here.

HUNT Twilight Open House Tours!

Our Twilight Open House events will be held one Wednesday each month starting Wednesday, May 15 from 5-7PM. If you’re on the hunt for your new home, make sure you check out all our open houses that are happening.

Looking to get the most out of an open house as a buyer? Here are a few tips:

Look past aesthetics. Overlook outdated decor and pay attention instead to the structure, and other aspects you can’t change, like the neighborhood.

Check out the neighborhood. You want to be sure you feel comfortable in the surrounding area of your new home. Drive (or walk) around the home and see what the neighbors are like. 

Ask questions

  • Are there any offers in on this home?
  • Why are the sellers moving?
  • When was the house built? Have there been any updates?
  • What are the neighbors like?
  • Where are the schools? How are they rated?

Looking for more tips? Check out our blog: How to Make The Most of an Open House as a Buyer.

Can’t make it this month? Don’t worry! We will be holding Twilight Open houses one Wednesday every month from June-August!

Spring Into Your New Home!

Get ready for Spring Into a New Home This Weekend!

On April 6 & 7, all HUNT Real Estate ERA offices will be holding an open house event. If you’re on the hunt for your new home, make sure you check out all our open houses that are happening this weekend: Open Houses

Looking to get the most out of an open house? Here are a few tips for buyers:

1. Figure out what you need… and what you don’t. Knowing what is important to you in a home is crucial. Open houses can help you decipher what your wants are vs. what your needs are.

2. Don’t just window shop. Remember that you are at an open house to assess the home. Purchasing a house is a major life decision, and one you shouldn’t take lightly, so make sure to investigate every part of a home that could potentially be yours.

3. Ask questions. While your agent should be there with you to conduct inquiries at an open house, you should ask questions about the home yourself too.

Looking for more? Check out our blog post on How to Get The Most Out of an Open House as a Buyer.