Before applying for mortgage you should decide for what you need the mortgage. It could e.g. be refinancing your existing home, your primary residence or an investment property. The options on mortgages depend on its use.
Typically, primary residences are preferred by lenders as they’re considered less risky. Down Payments can be below 5% of the listed price.
For investment properties, lender can be very strict and demand between 20 to 30% down payment for first time investors. In addition, certain property types, such as condos can be excluded.
It is recommended to talk to at least three lenders and get offers in to compare. You have 14 days to reach out to lenders without negatively impacting your credit score.
Get yourself prepared before reaching out to lenders. Go through the following list:
- List all your assets (stock investmebt, retirement funds, savings account etc.) and deduct any loans (credit card) to define your current net worth
- Look up your credit score. You have better chances to get an attractive offer with a good or excellent rating.
- Browse the housing market. What areas, home types and price ranges are interesting for you.
- Summarize your current profession. How long have you been with the company, what is your salary/bonus.
To give you a current example for a mortgage at Chase (requested Jan 2021) independent from your financial situation but company guidelines due to the economic crisis:
- Investment properties require a down payment of 30% and condos are excluded.
- Primary residences require a down payment of 5% and all types of property, including condos, are possible.
Further lenders to look at: Better, New American Funding, Quicken Loans.
Further reads:
Female Thrive 