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Happy Homeownership Month!

In order to help celebrate National Homeownership Month this June, we want to help make the home buying process easier and more transparent. Check out some of our most frequently asked questions to help get a better idea of how the home buying process works! If you need any help, a local Sierra Pacific Mortgage loan officer would be happy to talk with you.

Do I always need a 20% down payment to purchase a home?

The common thought process behind this question is that, by making a 20% down payment, you avoid needing to pay the additional Mortgage Insurance (MI) fee. This does not, by itself, cause you to be eligible or ineligible to purchase a home.

In most cases, you do NOT need to put down 20% to qualify for a home. There are many options to consider that require a much lower down payment.

In some cases, you may be eligible for a loan with a down payment as low as 3.5% or even no down payment at all!


Can I still purchase a home without having a perfect credit score?

While having a low credit score will not allow you to get the best possible rates, it is absolutely not the be-all-end-all! A credit score is not the only qualifying factor we use to determine your eligibility. In fact, there are many programs that aim to help those with lower credit scores to be eligible to purchase a home.

If you aren’t looking to purchase a home quickly, it is always wise to try to increase your credit score as much as possible before starting the process. This may help save money in the future.

To help improve your credit score, try to pay your bills on time and lower your debt-to-income ratio. Lenders like to see you owing only about 10% to 30% of your available credit. You can also get free copies of your credit report once a year from each of the main credit reporting agencies. Make sure to correct any discrepancies to ensure your report is an accurate reflection of your actual credit history.

Learn more about the mortgage process, and see what you are qualified for, by contacting a local Sierra Pacific Mortgage loan officer near you!

Is renting always cheaper than buying a home?

Not always. When deciding whether to rent or buy, make sure to factor in how frequently you will want to move in the near future and whether you want to build equity in your home by purchasing.

Factors such as rent increases and property appreciation sometimes make purchasing a home the smarter move, especially combined with low-interest rates.

For more of our most frequently asked questions, please visit our website!

We hope this helped make the mortgage process a little easier to understand. Of course, there is more to it than this, and everyone’s situation is a little different. To help navigate these waters, we suggest talking with a qualified mortgage loan officer to can help you determine what you qualify for and what loan can best meet your needs!

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