Buying a home or refinancing your current home can seem overwhelming. Don’t worry, we are here to help! Try reading some our most frequently asked questions people have for our loan officers here at New American Funding.
1. How fast can I get pre-approved?
You can be pre-approved in as little as 24-48 hours if you complete the application and submit required documents. Documents that must be submitted include: 2 years of federal tax returns, 2 years of W-2’s, 30 days of a pay stub and 2 months of bank statements. However, if you are self-employed you don’t need W-2’s or paystubs.
2. Are pre-approvals and being pre-qualified the same thing?
Being pre-approved and pre-qualified are two separate things. Pre-qualified means your information has not been verified but it gives you an idea of how much you can borrow. Being pre-approved means a lender has checked your income, assets and liabilities and has approved you for a certain loan amount.
3. I’m currently unemployed; can you work with no income?
Unfortunately, we cannot approve you for a loan without income. Two years of continuous employment is required.
4. Can you work with a low credit score?
580 is the minimum FICO requirement needed to get approved for a refinance or purchase.
5. Can you buy a home with no money down?
Yes, we have programs with USDA or VA that allow you to get pre-approved without putting money down. Additionally, it’s possible to get approved for a loan if you are using gifted funds for the down payment.
6. Can I buy a home if I have recently filed for bankruptcy?
No, however you can apply for an FHA or VA loan two years after your discharge date of your bankruptcy. New American Funding also has an exclusive program called “Back to Work” which you can apply for 12 months after your discharge date from a bankruptcy, foreclosure, short sale or dead in lieu.
7. Are adjustable rates bad?
ARMs (adjustable rate mortgages) are a great option if you plan to sell before the fixed period of 5-7 years and rates are high. You will be locked into a low rate until after the five or seven year period where the rate may change based on market conditions. People who are planning to move before a five or seven year period should consider an ARM because they can put more money towards the principle, there is no negative amortization, and no balloon payments, no pre-payment penalty and you can still take cash-out of the home.
8. Can I refinance without an appraisal?
Certain programs can allow you to refinance without an appraisal. These programs include FHA, VA, and HARP (Freddie Mac & Fannie Mae.)
9. I have cash that isn’t in a bank account, does that count?
Assets are an important part of getting approved for a loan. However assets have to be seasoned, meaning they have to show in a bank account for 60 days. The only exception to this would be if you are gifted funds. In this case you only need a gift letter to put these towards your down payment.