First Time Homebuyer Brochure
When you sit down with a lender, please be sure to get answers to these 10 questions BEFORE you go any further in the loan process.
1. What is the interest rate on this mortgage?
Be sure to ask for the annual percentage rate (APR) of the loan's interest. The APR is usually higher than the originally quoted rate because of the additional fees involved in procuring a loan. You must beware of APR found in advertisements. Often these are used in bait and switch schemes to get customers in the door. Always ask for an itemized list of rates, points and fees.
Be sure to ask for the annual percentage rate (APR) of the loan's interest. The APR is usually higher than the originally quoted rate because of the additional fees involved in procuring a loan. You must beware of APR found in advertisements. Often these are used in bait and switch schemes to get customers in the door. Always ask for an itemized list of rates, points and fees.
2. How many discount and origination points will I be charged and why?
Often lenders may charge prepaid mortgage interest points and junk fees. Find out the kind of points they will be and their effect on your loan.
Often lenders may charge prepaid mortgage interest points and junk fees. Find out the kind of points they will be and their effect on your loan.
3. Will you give me a good faith estimate (GFE) of my closing costs up front?
There are fees that are a part of every loan no matter what anyone says. These fees pay for the services provided by the lender and the other companies involved in the loan process. Have the lender give you a good faith estimate within three days of receiving your loan application, it is required by law. Be wary of any lender that refuses to supply an actual good faith estimate along with a truth-in-lending statement (TIL).
There are fees that are a part of every loan no matter what anyone says. These fees pay for the services provided by the lender and the other companies involved in the loan process. Have the lender give you a good faith estimate within three days of receiving your loan application, it is required by law. Be wary of any lender that refuses to supply an actual good faith estimate along with a truth-in-lending statement (TIL).
4. What are the fees, if any, involved in locking in my interest rate?
Interest rates are constantly fluctuating and it is possible that it could change between the time you apply for a loan and the time you close. Often you can “lock in a rate” that will keep your interest rate the same from the day you apply. Please make sure that you find out if there are any fees involved with this.
Interest rates are constantly fluctuating and it is possible that it could change between the time you apply for a loan and the time you close. Often you can “lock in a rate” that will keep your interest rate the same from the day you apply. Please make sure that you find out if there are any fees involved with this.
5. What is my down payment for this loan?
A typical down payment is between 3 and 20 percent of the loan amount. The more money you can put down, the better your chances are of being able to lower your rate and improve your loan terms. Sometimes, if you are unable to make a down payment of 20% of the loan amount, you will be required to pay private mortgage insurance (PMI). But there are still some 100% loan programs out there. Ask me, I’ll show you.
A typical down payment is between 3 and 20 percent of the loan amount. The more money you can put down, the better your chances are of being able to lower your rate and improve your loan terms. Sometimes, if you are unable to make a down payment of 20% of the loan amount, you will be required to pay private mortgage insurance (PMI). But there are still some 100% loan programs out there. Ask me, I’ll show you.
6. Is there a prepayment penalty on this loan?
Prepayment penalties may be added to lower the loan's interest rate. There are many types of prepayment penalties that can be added to a loan. Make sure that if your loan has a prepayment penalty, you are fully aware of the terms and conditions and how they might affect you.
Prepayment penalties may be added to lower the loan's interest rate. There are many types of prepayment penalties that can be added to a loan. Make sure that if your loan has a prepayment penalty, you are fully aware of the terms and conditions and how they might affect you.
7. What documents will I need to have?
This will depend on the type of loan you choose. A "Full-Doc" loan will require full documentation of income, assets, debt payments, etc... A "No-Doc” loan, on the other hand, does not require any documentation. "No-Doc" loans are only open to those with excellent credit and often require a larger down payment. They always carry higher interest rates and closing fees.
This will depend on the type of loan you choose. A "Full-Doc" loan will require full documentation of income, assets, debt payments, etc... A "No-Doc” loan, on the other hand, does not require any documentation. "No-Doc" loans are only open to those with excellent credit and often require a larger down payment. They always carry higher interest rates and closing fees.
8. What are my qualifying guidelines?
These requirements relate to your income, employment, assets, liabilities and credit history. First-time home buyer programs, FHA/VA loans and other government-sponsored mortgage programs typically offer different qualifying guidelines than conventional loans.
These requirements relate to your income, employment, assets, liabilities and credit history. First-time home buyer programs, FHA/VA loans and other government-sponsored mortgage programs typically offer different qualifying guidelines than conventional loans.
9. How long does it take to process a loan?
It can take as little as one week, to as long as 60 days or more. Be sure to have the lender give you the most accurate timetable possible so you can determine how far out you need to lock your interest rate.
It can take as little as one week, to as long as 60 days or more. Be sure to have the lender give you the most accurate timetable possible so you can determine how far out you need to lock your interest rate.
10. What might delay approval of my loan?
If you provide complete and accurate information to the lender, the process usually runs smoothly. Be sure to tell your lender immediately of any changes to your income or any new debt or marital status while your loan is processing. There could be delays if the underwriter discovers any undisclosed credit problems so be sure to be as accurate as you can.
If you provide complete and accurate information to the lender, the process usually runs smoothly. Be sure to tell your lender immediately of any changes to your income or any new debt or marital status while your loan is processing. There could be delays if the underwriter discovers any undisclosed credit problems so be sure to be as accurate as you can.
7 things you should NOT do when applying for a home loan!
This is a list of things to steer clear of when you are seeking to obtain financing for a home. The following items may prove to be a detriment when you wish to move forward with the loan process.
Don't buy or lease an auto! Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.
This is a list of things to steer clear of when you are seeking to obtain financing for a home. The following items may prove to be a detriment when you wish to move forward with the loan process.
Don't buy or lease an auto! Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.
Don't move assets from one bank account to another! These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.
Don't change jobs! A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.
Don't buy new furniture or major appliances for your new home on credit! If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet closing costs.
Don't run a credit report on yourself or apply for more consumer credit! This will show as an inquiry on your lenders credit report. Inquiries must be explained in writing and can lower your scores.
Don't attempt to consolidate bills before speaking with your lender! The lender can advise you if this needs to be done.
Don't pack or ship information needed for the loan application! Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.
Why do I offer this report free of charge? I am offering this free of charge because I want to be your mortgage planner. I offer more than simply a loan: I'll personally advise you on how to use and apply the principles contained in this report. Worried that you can't remember all of what is contained here?
Call me. I want to earn your business.
I hope you have enjoyed this special report. Please contact me to set up your No-Obligation consultation where we will meet to tailor a program to fit your needs and comfort levels for monthly payment and investment.
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