Pre-Qualification: An initial, informal estimate of your borrowing power based on self-reported information. Quick and easy, but not as reliable or respected as pre-approval. Pre-Approval: A detailed and verified evaluation of your financial status, resulting in a commitment from the lender (with conditions). Takes more time and effort but provides a stronger position when making offers on homes. Most serious homebuyers opt for pre-approval to strengthen their position in the competitive real estate market.

To determine how much you can afford to borrow: Assess your income and debts. Calculate your DTI ratio. Factor in your down payment. Estimate your monthly housing costs. Apply the 28/36 rule for a general guideline. Use mortgage calculators for precise estimates. Get pre-approved for a detailed and accurate loan amount. This approach ensures you have a realistic understanding of your borrowing capacity and can make informed decisions during the homebuying process.

The interest rate on your mortgage will depend on various factors, some within your control and others dictated by the broader economic environment. Personal Financial Factors Credit Score: Higher credit scores generally qualify for lower interest rates. Scores above 740 typically get the best rates, while scores below 620 may struggle to secure favorable rates. Down Payment: A larger down payment can lower your interest rate. Putting down at least 20% can help you avoid private mortgage insurance (PMI) and get better rates. Loan Amount and Term: Loan amounts that are too small or too large can affect your rate. Additionally, shorter loan terms (like 15 years) usually have lower rates compared to longer terms (like 30 years). Debt-to-Income Ratio (DTI): A lower DTI ratio (total monthly debt payments divided by gross monthly income) can improve your chances of getting a lower rate. Lenders prefer DTIs below 36%. Employment History: Stable employment and consistent income can positively influence your rate. Lenders look for at least two years of steady employment. External Economic Factors Federal Reserve Policies: The Federal Reserve’s actions on interest rates can indirectly affect mortgage rates. When the Fed raises or lowers rates, it influences the overall economic environment, impacting mortgage rates. Economic Conditions: Economic growth, inflation, and employment rates can all affect mortgage rates. Strong economic growth and higher inflation typically lead to higher rates. Bond Market: Mortgage rates are influenced by the yields on 10-year Treasury bonds. When bond yields rise, mortgage rates often follow.

Choosing the right down payment amount involves balancing your available funds, monthly budget, and long-term financial goals, and type of mortgage. Conventional Loans: As low as 3-5% down (requires PMI until you LTV reaches 80%) Putting 20% down will help avoid private mortgage insurance (PMI) FHA Loans: 3.5% of the home's purchase price Requires mortgage insurance premiums (MIP) for the life of the loan if your down payment is less than 10% VA Loans (for Veterans & Active Military): No down payment required and no PMI Must meet service requirements and obtain a Certificate of Eligibility (COE USDA Loans (for Rural Areas): No down payment required Designed for low-to-moderate-income buyers in eligible rural areas Jumbo Loans: Typically 10-20% of the home's purchase price Stricter credit and income requirements with higher interest rates

Initial Deposit: Funded at closing. Monthly Payments: A portion of your mortgage payment goes into the escrow account. Payment of Bills: Lender uses escrow funds to pay property taxes and insurance. Annual Analysis: Lender reviews account to adjust for any changes in tax and insurance costs. Shortages and Surpluses: Managed by adjusting future payments or issuing refunds. An escrow account provides peace of mind by ensuring that property taxes and insurance are paid on time, helping you avoid penalties and ensuring continuous coverage.

Please see the steps below to view the complete homebuying process from pre-approval to post-closing.

Review Fairway's Document Checklist and submit an application - Click "Apply Here" at the top of this page to start your journey to homeownership today! Once an application has been submitted, Michelle and her team will be in touch to review your application with you and discuss your budget for a home.

You will work with a trust real estate agent to find the type of home you're looking for within your budget. Don't have a real estate agent yet? We would be happy to refer one of our amazing agents that will match your homebuying needs. Make an offer!

Once you have a property address determined, let us know so we can provide a breakdown of monthly payments and estimated closing costs.

Once you and the seller agree on a price, a contract is created and accepted.

A copy of the contract is sent to The Michelle Team and Fairway Independent Mortgage Corporation by yourself or your realtor.

Loan estimates and federal disclosures are delivered to the borrower. You must them provide your intent to proceed within a timely manner.

Michelle and the team will order your appraisal on your behalf and submit to the underwriter for approval.

An underwriter will review your loan application and determine if additional documentation is needed. If anything is needed, Michelle and her team with reach out to request on the underwriters behalf.

Once all information has been approved, your loan is clear to close!

Michelle and her team will provide closing disclosure to the borrower, who can share with their real estate agent if they wish to do so.

Closing documents are sent to the title company for approval.

Michelle and her team will contact you with final figures and information. Be sure to confirm payment method with the title company - wire fraud is a significant issue and all payment information will always need to be confirmed with your Title Agent directly.

You will meet at the title company's office or with a scheduled notary to sign closing documentation.

Congratulations - you are now official a homeowner!

It has been such an honor assisting you in your homebuying process. We are genuinely excited for you and are here to provide any additional information you might need about your current loan or any purchases/refinances you may have in the future! We will follow up with you before your first payment is due but please feel free to used our servicing portal for more detailed information on making your payment. Click HERE and enter your Fairway loan number. Fairway Loan Servicing Support: Phone: 1-800-200-7544 servicing@fairwaymc.com