Which Type of Mortgage is Right For You

Borrowing and Credit, Home Ownership

Mortgage 101

A home is one of the largest if not the largest investments you’ll make. Just as you research a car or electronics purchase, the same time and attention must be put into a home, especially the financing of it. Many factors come into play when you apply for a home loan (mortgage), and if you educate yourself, the process of making such a large purchase can be painless.

Tips on Getting the Right Mortgage

  • Pay your bills. Your credit score is a major factor in determining the interest rate of your mortgage loan. The higher the credit score, the better rate you’ll receive. In order to keep your score high, make sure to pay your bills on time. For more information about credit score, click here.
  • Be sensible. As you begin the mortgage process, know what type of home you want, how much you qualify for and what your budget can afford.
  • Shop around. It can’t hurt to get pre-approved at multiple financial institutions. Rates may vary which may lead to monthly savings.
  • Look for low down payment options. There’s a common misconception among hopeful home buyers that one must save 10 to 20 percent for a down payment before they can even dream of owning a home. In today’s market, that’s simply not true. In fact, there are several mortgage options available that require little or no down payment.

Types of Mortgage Loans

While you should always conduct thorough research before financing a home, consider an FHA loan or a VA loan. Some financial institutions will even finance a conventional loan with as little as 3 percent down. Work with your financial institution to determine what type of loan you qualify for and to determine which option is the best for you.

FHA loans

  • 3.5 percent down
  • Income must be verified with W2 statements or federal tax returns
  • No history of bankruptcy, foreclosure or short sale within the past 24 months
  • Can’t be delinquent on any federal debt such as taxes or federal student loans

Conventional 97

  • 3 percent down
  • May be more affordable to some buyers when compared to an FHA loan

VA loans

  • 0 percent down payment available
  • Available to:
    • Active duty
    • Honorably discharged service members
    • Members of the Reserves or National Guard who have served six years or more
    • Surviving spouses of members killed in the line of duty

At Centris, we also offer our own program called My First Home. This Centris exclusive lets first-time home buyers finance with as little as $500 down and doesn’t require the home buyer to pay monthly mortgage insurance saving you money each month for the life of your loan.

Mortgage Pre-Approval Process

Once you’ve decided what type of loan you will get, it’s time to get pre-approved. Pre-approval gives you negotiating power when you find your dream home. When applying for pre-approval, you’ll need:

  • 30 days of pay stubs
  • Two years of W2 statements
  • Most recent 30-day asset statement

Set Yourself Up for Success

Mortgage experts will tell you that it’s important to not make any large purchases on credit or apply for new credit once you’ve started the mortgage process. Doing so can quickly set you back and cause significant delays as you approach your closing date.

Our local neighborhood mortgage experts can you help you with any questions you have when it comes to buying your first home, dream home or something in between. Click here or call us at (402) 334-7000 option 0 to be transferred to a mortgage services representative.


<a href="https://www.centrisfcu.org/blog/author/liz-nowaczyk/" target="_self">Liz Nowaczyk</a>

Liz Nowaczyk


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