Buying your first home is a significant and important milestone, and it is normal to have questions along the way. At Needham Bank, our team is here to walk you through each step. Below, we’ve answered some of the questions we hear most often from first-time buyers.
What is private mortgage insurance?
Private mortgage insurance, or PMI, protects the lender if you are unable to make your mortgage payments. It is typically required when your down payment is less than 20% and is usually included in your monthly mortgage payment or paid at closing.
What is an adjustable-rate mortgage?
An adjustable-rate mortgage, or ARM, typically starts with a lower interest rate than a fixed-rate mortgage. After an initial fixed period, the rate may change based on market conditions, which can affect your monthly payment.
What is prequalification?
Prequalification is an informal estimate based on information you provide about your income, assets, debts, and other financial factors. It can help you understand how much you may be able to borrow. Needham Bank offers prequalification services only and does not provide mortgage preapprovals.
How much home can I comfortably afford?
That depends on your income, debts, assets, credit profile, and overall financial goals. A loan officer can review your situation and help identify a residential loan option that fits your budget and needs.
What type of loan program is best for me?
The right loan program depends on your financial situation, residency, property location, goals, and available options. A dedicated lending expert can help you compare programs and choose the one that best fits your needs.
How much do I need for a down payment and closing costs?
Down payment requirements vary, but many buyers need between 3% and 15% down, plus estimated closing costs. Some programs may help reduce the amount you need upfront.
What is included in my monthly payment?
Your monthly payment generally includes principal, interest, taxes, and insurance. Depending on your loan and down payment, it may also include private mortgage insurance.
What documents will I need to provide?
Generally, you’ll need documents related to your income, assets, tax returns, and identification. Your loan officer will provide a checklist so you know exactly what is required.
Are there any first-time homebuyer programs available?
Yes. Depending on your situation, there may be programs that offer lower down payment options or additional assistance to help make homeownership more accessible.
Ready to take the next step toward owning your first home? Contact a Needham Bank loan officer today.
