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Mortgage Guide

About Having Your Loan Approved
About Applying for a Loan
About The Mortgage Loan Process
About Types of Loans
About Choosing the Appropriate Loan
About Your Credit

About Having Your Loan Approved

A mortgage loan application is approved or denied on the basis of: Property value, current earnings and available funds, and your down payment.

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About Applying for a Loan

For prequalification, you will need to provide your income, debt, and down payment amount.

When applying for a loan, you may need to provide:

Copy of purchase sales contractProperty information listing sheetW2 formsPay stubsEmployment historySocial Security numbersBank statements for checking and savings accountsTax returnsStocks, bonds, and investment accountsIRA/Retirement planLife insurance policiesAutomobiles ownedConstruction loanGift LettersOther incomeIf renting provide: Landlord's name, address, and phone numberIf self-employed provide: Profit and Loss Statement

If student provide: School transcripts or diploma

If owner of rental properties provide: Signed Federal tax returns

In addition, if the real estate owned is:

currently rented - provide a copy of the current lease or rental agreementlisted for sale - provide a copy of the listing agreementsold, but not closed - provide a copy of the sales contract and escrow number

sold, closed, and proceeds will be used for down payment - provide a copy of the HUD-1 Uniform Settlement Statement

Talk to a loan officer to see if you qualify for any of these affordable housing loan programs:

Community Home Buyer's Program Mortgage Revenue Bond Authorities

Guaranteed Rural Housing Loan

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About The Mortgage Loan Process

Preapproval - choose a loan officer and request preapproval then negotiate an offer to purchase or a sales contract with your real estate agent

Income Verifications - credit checks, insurance applications

Application - complete the loan application with your lender.

Truth-in-Lending Disclosure - (received within 3 days of application)

Processing - your credit report, debt and payment histories, and home appraisal are reviewed

Lender Writing - the loan package is reviewed then approved or denied

Mortgage Insurance Underwriting - If less than 20% was put down on a conventional loan, a private mortgage insurance application will be submitted

Pre-Closing - after the loan is approved, the title insurance is ordered and closing is scheduled. It would be a good idea to order hazard insurance now.

Closing - Closing costs include: Appraisal fee, Credit report, Points (Origination and Discount)

To find the best deal make sure to look over these items :

Sales commissionSurveyTitle insurance

Recording changes

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About Types of Loans

Conventional - A mortgage that is not insured or guaranteed by the federal government.

FHA (Federal Housing Administration) - A mortgage that is insured by the Federal Housing Administration. Also known as a government mortgage.

VA (Veterans Administration ) - A government agency guaranteeing mortgage loans with no down payment to qualified veterans.

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About Choosing the Appropriate Loan

Spending Patterns

If you like spending money, then you should spend less on your mortgage each month by qualifying under the maximum amount you can afford. Otherwise you can repay your loan sooner by increasing your monthly mortgage payments and save money on interest payments.

Payment Security

An adjustable-rate mortgage (ARM) usually offers a lower initial interest rate, however, your mortgage payments may move up or down periodically. This loan is best for those who are self-employed or earn commission because your income and interest rate usually fluctuates with the market.

Term of Occupancy

A fixed rate mortgage is best if you plan on staying in your home for a while. If you plan on moving within a few years, an adjustable-rate mortgage will save thousands of dollars in interest or buy down because the initial interest rate is lower.

Equity Build-up

The sooner you repay your loan, the faster your home's equity grows. To repay faster choose a shorter loan term (15 year).

Low Down Payment

For a low down payment choose an FHA loan. An FHA loan allows for a greater amount of monthly debt with little money down.

Credit Problems

If you have credit problems, choose an FHA loan. It allows home buyers to qualify with a greater amount of monthly debt than a Conventional loan.

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About Your Credit

Your credit report is the first step in applying for a loan. Knowing what is in it is often the most important question that a borrower can have. Some of these sites will let you request a credit report online, while others require a written request.

TRW Information Systems - TRW / ExperianEquifax - Order a copy of your credit report online.

Trans Union - a primary source of credit information and offers risk and portfolio-management services

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Mortgage Guide About Having Your Loan Approved About Applying for a Loan About The Mortgage Loan Process About Types of Loans About Choosing the Appropriate Loan About Your Credit About Having Your Loan Approved A mortgage loan application is approved or denied on the basis of: Property value, current earnings and available funds, and your down payment. TOP About Applying for a Loan For prequalification, you will need to provide your income, debt, and down payment amount. When applying for a loan, you may need to provide: Copy of purchase sales contractProperty information listing sheetW2 formsPay stubsEmployment historySocial Security numbersBank statements for checking and savings accountsTax returnsStocks, bonds, and investment accountsIRA/Retirement planLife insurance policiesAutomobiles ownedConstruction loanGift LettersOther incomeIf renting provide: Landlord's name, address, and phone numberIf self-employed provide: Profit and Loss Statement If student provide: School transcripts or diploma If owner of rental properties provide: Signed Federal tax returns In addition, if the real estate owned is: currently rented - provide a copy of the current lease or rental agreementlisted for sale - provide a copy of the listing agreementsold, but not closed - provide a copy of the sales contract and escrow number sold, closed, and proceeds will be used for down payment - provide a copy of the HUD-1 Uniform Settlement Statement Talk to a loan officer to see if you qualify for any of these affordable housing loan programs: Community Home Buyer's Program Mortgage Revenue Bond Authorities Guaranteed Rural Housing Loan TOP About The Mortgage Loan Process Preapproval - choose a loan officer and request preapproval then negotiate an offer to purchase or a sales contract with your real estate agent Income Verifications - credit checks, insurance applications Application - complete the loan application with your lender. Truth-in-Lending Disclosure - (received within 3 days of application) Processing - your credit report, debt and payment histories, and home appraisal are reviewed Lender Writing - the loan package is reviewed then approved or denied Mortgage Insurance Underwriting - If less than 20% was put down on a conventional loan, a private mortgage insurance application will be submitted Pre-Closing - after the loan is approved, the title insurance is ordered and closing is scheduled. It would be a good idea to order hazard insurance now. Closing - Closing costs include: Appraisal fee, Credit report, Points (Origination and Discount) To find the best deal make sure to look over these items : Sales commissionSurveyTitle insurance Recording changes TOP About Types of Loans Conventional - A mortgage that is not insured or guaranteed by the federal government. FHA (Federal Housing Administration) - A mortgage that is insured by the Federal Housing Administration. Also known as a government mortgage. VA (Veterans Administration ) - A government agency guaranteeing mortgage loans with no down payment to qualified veterans. TOP About Choosing the Appropriate Loan Spending Patterns If you like spending money, then you should spend less on your mortgage each month by qualifying under the maximum amount you can afford. Otherwise you can repay your loan sooner by increasing your monthly mortgage payments and save money on interest payments. Payment Security An adjustable-rate mortgage (ARM) usually offers a lower initial interest rate, however, your mortgage payments may move up or down periodically. This loan is best for those who are self-employed or earn commission because your income and interest rate usually fluctuates with the market. Term of Occupancy A fixed rate mortgage is best if you plan on staying in your home for a while. If you plan on moving within a few years, an adjustable-rate mortgage will save thousands of dollars in interest or buy down because the initial interest rate is lower. Equity Build-up The sooner you repay your loan, the faster your home's equity grows. To repay faster choose a shorter loan term (15 year). Low Down Payment For a low down payment choose an FHA loan. An FHA loan allows for a greater amount of monthly debt with little money down. Credit Problems If you have credit problems, choose an FHA loan. It allows home buyers to qualify with a greater amount of monthly debt than a Conventional loan. TOP About Your Credit Your credit report is the first step in applying for a loan. Knowing what is in it is often the most important question that a borrower can have. Some of these sites will let you request a credit report online, while others require a written request. TRW Information Systems - TRW / ExperianEquifax - Order a copy of your credit report online. Trans Union - a primary source of credit information and offers risk and portfolio-management services TOP
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