Homebuyer FAQ's Answered - Part Three

  • Posted on: May 18, 2018
Homestar FAQ - Part Three

We are back for one final round of homebuyer FAQs! Over the last two weeks, we covered ten common questions from families currently thinking about – or who are in the process of – obtaining a home loan.

We hope these questions help you throughout your home buying journey. As always, you can reach out to us with more questions – we are always here to help you find “the easiest way home.”

5 Homebuyer FAQ’s answered:

1. Q: How much is my payment going to be?

    A: Homestar will quote you an “estimated” payment based on your pre-approval amount and what the payment consists of (PITI). In addition, the homeowner insurance and property taxes are estimated based on average costs. However, once you decide on a property and we are able to verify the property taxes, and know how much you will be paying for the homeowner insurance, we will be able to determine a more accurate payment amount.

2. Q: Will my payment change?

    A: If you have a fixed-rate loan then the loan payment (principal and interest portion of your loan) would not change. However, if you escrow the escrows for property taxes and Homeowners (Hazard) Insurance may change as the cost for these items change. If you have PMI (Private Mortgage Insurance), then depending on what type of loan you have this would normally go down over time. The MI (Mortgage Insurance) on some FHA loans does not go away.

HOA (Home Owners Association) dues are generally not escrowed into the payment and do change over time.

3. Q: How much money will I need?

    A: Homestar will provide you with an “estimated” dollar amount based on your loan program and pre-approval amount. In addition, the cash to final close will depend on seller contribution, etc. Once you find a property, a Loan Officer will provide you with a complete loan estimate, which will detail the costs of the loan and will be based on the terms of the sales contract.

4. Q: What is the Georgia Dream Assistance Program? Does it have to be repaid?

    A: The Georgia Dream Assistance Program is a State Funded Program that allows you to come in with very little down payment. The program is restricted to certain areas and income limits. The only way we can continue to offer the assistance to first-time buyers is to have the funds repaid. Oftentimes, this is the only program in which some borrowers can afford to purchase a home. You will have a first mortgage for the 96.5% loan and a second mortgage for the assistance funds. The second mortgage (assistance money) does not have to be repaid if you remain in the home for the full term (30 years). However, if you sell or refinance the home before the end of the term – the $5,000, or $7,500 (whichever is applicable), will be added to the balance of the first lien payoff at closing.

5. Q: My spouse’s credit is not the best, what can we do? We need both incomes to buy a house; he makes more money than I do.

    A: Your loan is based on the middle of the three credit scores, and on the lower of the two co-borrowers. Let us see how we can maximize his scores to use both of you on the loan. Is there a possibility of another co-borrower who will sign with you?

Bonus Question:

Q: I admit I have a foreclosure in the past; how does that affect me buying a house now?

A: It depends on how long ago it was – there is a grace period of 3-7 years, and if over three years, you may qualify for first-time homebuyer assistance.

Remember, you can contact the Homestar Team at any time with your home loan questions or for more information. We are here to help get you home!

Missed Part 2 of our “Homebuyer FAQ” series? You can always reference the post here.

Part 1 can be referenced at this link as well.

Copyright © 2018. Homestar Financial Corporation NMLS. #70864 Georgia Residential Mortgage Licensee #17368. This is not an offer to enter into an agreement or a commitment to lend. Not all customers will qualify. All terms, information, conditions, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all loan products are available in all states. The advertised rates/APRs and terms are examples of loan products available as of the date indicated and are subject to change without notice. The loan terms (APR and Payment examples, if applicable) listed do not include amounts for taxes or insurance premiums. The monthly payment amount will be greater if taxes and insurance premiums are included. Certain other restrictions may apply. Homestar Financial Corporation is not affiliated with any government entity. Posted 5/18/2018.