Home Finance | 10.02.2023

Common Questions About Home Financing and Home Loans

Arive Homes Can Help You With A Home Loan

If you’re considering purchasing a home, you’re probably on the path to learning more about home loans in Utah. Like any other step in the home-buying process, it’s common to have many questions about home financing. At Arive Homes, our helpful financing team is here to answer every question regarding Utah home loans. Here are some quick, common questions about financing and our best answer.

What is a home loan?

A home loan is a sum of money loaned to a borrower from a lender solely to purchase a house, condo, apartment, or any other type of livable property. Included in the home loan, or mortgage is an agreement between the bank and borrower to pay off the amount borrowed over a set period of time.

What are the different types of home loans available?

The most common mortgages are conventional, jumbo, construction, government-backed, fixed-rate, and adjustable-rate. As you can imagine, one size doesn’t fit all regarding mortgages. Arive Homes can help you determine the type of Utah home loan that best suits your circumstances.

How do I qualify for a home loan?

Lenders will look at several factors, such as household income, to ensure you can afford the mortgage. Other factors, such as debt-to-income ratio, are considered. You’ll likely qualify for a mortgage if these factors fall within specific parameters.

What factors affect my eligibility and interest rate for a home loan?

It’s important to note that different loans have different qualifications. However, when applying for home loans, lenders will consider your credit score, debt, property type, and current assets. For example, many lenders require a credit score of at least 620 to receive a home loan.

How much down payment is typically required for a home loan?

Many lenders require a 20% down payment to receive a home loan, but this can change based on the loan type. Other mortgages require a 5% down payment, while some require as little as 3%. Generally speaking, the more you can put down on a loan, the better interest rate you’ll receive.

What is the difference between a fixed-rate and an adjustable-rate mortgage?

A fixed-rate mortgage is an installment loan with a fixed interest rate throughout the entirety of the mortgage, while an adjustable-rate mortgage features rates that can go up or down at any time. What changes the rate of adjustable-rate mortgages? In many cases, it is market trends.

Home Loan Questions | Arive Homes

How do I compare different mortgage lenders and their loan terms?

It’s wise to shop around for mortgage lenders and their loan terms. At Arive Homes, our financing team makes this process easy. Set up an appointment with a loan officer at our office in Orem. We’ll help you determine the best loan for your situation and help you get the best interest rate.

What documents and information are needed for the mortgage application process?

When you begin the application process, you must provide various documents, including proof of income (pay stubs, W-2s, or other documents), credit reports, bank statements, photo ID, employer information, and more. The requirements may vary based on the lender.

What are the closing costs associated with a home loan?

Closing costs are expenses and other fees that buyers and sellers pay to secure a loan for a home. These differ from a down payment, typically about three to five percent of the loan amount. They often include taxes, appraisals, title insurance, and more.

Home Financing Questions | Arive Homes

Are there any government programs or incentives for first-time homebuyers?

Yes, government programs or incentives are available for first-time homebuyers in Utah. Utah Housing Corporation (UHC) has several programs to help first-time buyers. Schedule an appointment with our friendly finance team, and we’ll gladly help you through the process.

Can I get pre-approved for a home loan? Why is it important?

If you’re searching for a new single-family home in Utah, getting pre-approved is essential. Becoming pre-approved will help you understand how much you’ll be able to afford for a mortgage. You’ll also have an advantage over buyers who haven’t been pre-approved because sellers prefer pre-approved buyers.

How long does it take to get approved for a home loan?

The answer to this question can vary based on several factors, but the average time for loan approval on a mortgage is about 30 days. However, in some cases and depending on the lender, it can take longer–up to 45 to 60 days.