💰 Your Guide to Home Financing

A simple, no‑jargon breakdown of how mortgages really work — and how to get ready to buy with confidence.

Financing is one of the most confusing parts of buying a home — but it doesn’t have to be.This guide walks you through the essentials so you understand your options, avoid surprises, and set yourself up for a smooth, successful purchase.

🧾 1. Pre‑Approval vs. Pre‑Qualification

These two terms get mixed up all the time — but they’re very different.

Pre‑Qualification

A quick estimate of what you might be able to afford.Based on self‑reported info.Not verified.Not strong enough for an offer.

Pre‑Approval

A lender reviews your actual documents:

• Income
• Credit
• Debts
• Assets

You receive a letter confirming your approved loan amount.This is what sellers want to see.

🏦 2. The Most Common Loan Types (Explained Simply)

Conventional Loan

• Most common
• Good rates with strong credit
• As little as 3% down

Best for buyers with stable income and good credit.

FHA Loan

• 3.5% down
• More flexible credit requirements
• Great for first‑time buyers

Best for buyers who need a little more wiggle room.

VA Loan

• 0% down
• No PMI
• For eligible veterans + active duty

One of the best loan products available.

Jumbo Loan

• For higher‑priced homes
• Stricter credit + income requirements

Best for buyers purchasing above conforming loan limits.

📉 3. How Interest Rates Really Work

Your rate is based on:

• Credit score
• Debt‑to‑income ratio
• Loan type
• Down payment
• Market conditions

A small rate change can impact your monthly payment more than you think — which is why timing and preparation matter.

💳 4. How Credit Impacts Your Buying Power

Your credit score affects:

• Your interest rate
• Your loan options
• Your monthly payment
• Your total buying power

General rule:  Higher credit = lower rate = more home for your money.

📅 5. What to Do 90 Days Before You Buy

These steps make a huge difference:

• Don’t open new credit cards
• Don’t finance a car or large purchase
• Don’t move money between accounts
• Pay bills on time
• Keep credit card balances low
• Gather documents (W‑2s, pay stubs, bank statements)

Lenders love stability — and so do sellers.

🧮 6. Understanding Your Monthly Payment

Your payment includes more than just the mortgage.

It typically covers:

• Principal
• Interest
• Taxes
• Homeowners insurance
• HOA fees (if applicable)
• PMI (if required)

Knowing the full picture helps you shop confidently.

🏡 7. How Much Should You Put Down?

There’s no one right answer.

3–5% Down

Great for first‑time buyers.

10–20% Down

Lower monthly payments + no PMI at 20%.

Cash Buyers

Stronger offers + faster closings.

Your down payment should match your comfort level — not someone else’s opinion.

🧠 8. Common Financing Myths (Debunked)

❌ “I need 20% down.”  Not true — many buyers put down far less.

❌ “I can’t buy if I have student loans.”  You absolutely can.

❌ “Pre‑approval hurts my credit.”  One inquiry has minimal impact.

❌ “I should wait for the perfect rate.”  Rates change daily — timing the market is impossible.

⭐ 9. How to Choose the Right Lender

Look for:

• Clear communication
• Competitive rates
• Local experience
• Fast response times
• Transparent fees

A great lender makes the entire process smoother.

📞 Want Help Getting Pre‑Approved?

I work with trusted local lenders who offer competitive rates, clear communication, and fast turnarounds — the exact combination you need in today’s market.

If you want recommendations or want to understand your buying power, I’m here to help.

Call or Text: 912‑414‑4427Email: PennyRaffertyRealty@gmail.com

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