Homebuyer FAQs Answered

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It’s perfectly reasonable to have questions as you’re entering the homebuying and mortgage process. Whether you’re purchasing your first or fifth home, the process can create a wide range of emotions. Expanding your education is one of the best ways to ensure the process is as stress-free as possible. To assist in your mortgage education, we asked our Loan Originators for the answers to the questions they’re asked the most during the homebuying process.

What is the interest rate today?

The answer will always depend on your profile obtained from your preliminary application including your credit profile and debt-to-income ratios. Other factors that affect your interest rate will be what loan product will best suit your goals and the amount of funds you have available for your down payment and the fees associated with purchasing a home.

Answered by Joe DeLorenzo, Albany branch

What is the maximum house price I can qualify for?

The price of the house is the biggest piece any buyer focuses on. However, you’re really qualifying for a maximum housing payment, which can vary greatly from house to house. Aside from fluctuations in interest rates, the biggest factor in determining the mortgage payment is the taxes on the property. I could give a “maximum” on any particular property, but it would be misleading since some houses at that price may have a higher or lower payment. Be sure you’re speaking openly with your Real Estate Agent and Loan Originator about your affordability concerns.

Answered by Geoff Gold, Cornwall branch

Should I pay off my debts with the highest balance?

Let’s say you have a car loan with a $20,000 balance and a payment of $250/month. Let’s also say you have a credit card with a $3,500 balance and another $250/month payment. Lenders are going to factor in the monthly payment when determining your debt-to-income ratio, not the remaining balance. In this example, it would make more sense to pay off the credit card and use the remaining funds for your closing costs instead of your car loan balance.

Paying off debts helps to improve your credit. On top of it, if someone is trying to qualify for a loan and their debt-to-income is high, paying off credit cards can help improve affordability. Once a person’s debts are paid off, I no longer have to count that debt when they’re trying to qualify for a loan.

Answered by Chris Madden, East Syracuse branch

How long does it take to obtain a pre-qualification letter before I begin house hunting?

First, my borrower fills out a preliminary application via e-mail for their pre-qualification letter. Once the application review is completed, it typically takes less than 30 minutes to evaluate the options we can offer for you to begin house hunting with your Real Estate Agent. Homestead Funding is all about customer service and timely action to assist our clients and their families.

Answered by Joe DeLorenzo, Albany branch

Is it appropriate to get a gift from my parents for part of my down payment?

Absolutely! We will help you properly document and transfer gift funds to ensure a smooth and quick closing process. Gift funds are allowed on all types of loans. The other great news? The IRS currently allows gifts up to $15,000 to not be taxed. So, each parent can gift up to $15,000 each without implications.

Answered by Kristen Brooke, Clifton Park branch

Can I roll my closing costs into my loan?

There are only some loans that allow this. Many times, we can include a “seller’s concession,” which is a way to add a portion (or sometimes all) of the closing costs into the purchase price. This requires the seller’s approval and a slightly higher appraised value than usual.

In a seller’s market, this becomes increasingly difficult. I recommend running the specifics by your Loan Originator and get your Real Estate Agent’s opinion.

Answered by Geoff Gold, Cornwall branch

What happens if a home appraisal comes in low?

If your appraisal returns at a lower value, you have a few options:

You may let your Real Estate Agent renegotiate with the seller’s agent. You may be able to negotiate for the seller to lower the asking price if the buyer contributes a bit more funds.

If there’s a lot of demand for the home, another option would be for the buyer to come up with more money out of pocket.

Answered by Chris Madden, East Syracuse branch

Do I need to make a 20% down payment?

No, there are many ways to purchase a home with very little money down. My job is to evaluate your entire financial picture and recommend what loans will work best for you. From there, I can help you make decisions and determine why a specific program will work for your financial needs.

Answered by Caroline Hommel, Saratoga Springs branch

Homestead Funding offers a variety of loan programs with different down payment requirements, whether you’re a first-time homebuyer or a repeat homeowner.