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Can I get pre-qualified or pre-approved for a home purchase loan before I’ve
found my property?
Absolutely. However, you
should not confuse a pre-approval with a pre-qualification. During the pre-qualification
process, our Mortgage Consultant will ask you a few questions and hand you a pre-qualification
letter. The pre-approval process is much more complete.
During a pre-approval, our
Mortgage Consultant does all the work of a full-approval, except for appraisal and title
search. When you are pre-approved, you become like a CASH BUYER and have more negotiating
leverage with the seller. In some cases (especially in multiple-offer situations), having a
pre-approval can make the difference between buying a home and not buying a home. In other
instances, home buyers have been able to save thousands of dollars as a result of being in a better
negotiating situation.
Most good Realtors will not
show you homes before being pre-approved because they do not want to waste your time, the seller’s
time, and their time. Sundeck Mortgage will pre-approve you at no cost. We will typically need to check your credit and
verify your income and assets.
Once your loan has been
approved you can change any of these variables to match the specifics of your purchase
transaction. Please note that we cannot lock in a loan until a property address has been
specified. top
Can I make changes to my
application?
Yes, you can make changes
anytime before you lock in your rate. Keep in mind that any changes you make may extend the
time that it takes to close your loan, may increase the cost of closing and may effect your
interest rate. We recommend that you complete your original loan application accurately and
completely prior to submitting. Once you receive confirmation of your rate lock, you should
review the terms carefully and contact your mortgage consultant immediately if any corrections are
need. top
Do
I have to finish filling out my application at one time?
No.
Sundeck Mortgage gives you the convenience of changing or finishing your application at any
time before final submission to lender. Simply call 1.800-760-0695or e-mail your
Mortgage Consultant to have confidential changes made to your existing application. top
How do I increase and protect my credit rating?
Here are a few general tips to
assist you in raising and maintaining your credit score:
- Maintain two to three
revolving charge accounts (such as Visa or MasterCard) in good standing.
- Have a couple of
other credit card accounts, such as department stores or gas cards, in good
standing.
- Avoid “finance”
company credit card offers.
- Avoid credit
inquiries-they lower your credit score.
- Don’t max out your
credit cards-the ratio of available credit to your total credit balances is very
important.
- Don’t apply for
multiple credit lines; this triggers an inquiry of your credit, which lowers your credit
score.
- Never
co-sign a loan for someone else top
How long will it be before we will know if the loan is approved or
not?
If your application is
received online, we can give you a preliminary pre-approval within 8 business hours. In other
instances between 24-48 hours from the time we receive your application. However, this is
dependent on your credit scores and overall file. In some cases it could take a little
longer, such as 5-8 business days. top
How
long will it take to close the loan?
If everything goes smoothly,
we should be able to close in as little as 10 days. top
How will my credit score affect my loan application?
Credit scoring plays a
significant role when you apply for a loan. Higher credit scores help you to be eligible for more
loan options. If you've had credit difficulties in the past, there are still mortgage programs
available, but they will usually cost more and will vary depending on the severity of your credit
problems. top
Should I refinance?
The significant and most
common reason for refinancing is to save you money. You can save a lot of money every month
by lowering the interest rate on your current loan. How much you can save depends on a lot of
factors. You have to consider how much it will cost in fees in order to realize the savings
in your payment. Saving money through refinancing can be achieved by obtaining a lower
interest rate, which causes your monthly mortgage payment to be reduced or by reducing the term of
the loan, which saves money over the life of the loan. Even if the fees get added on to the
loan balance, they're still there. A good option for a lot of people is to get a loan with no
points or fees. But those loans come with higher interest rates.
You may also consider
refinancing in order to convert your adjustable loan to a fixed loan. The main reason for
this is to obtain stability and security offered by a fixed loan rate over the term of the
loan. Adjustable rates are popular when rates are higher whereas when rates are low most
people tend to lock in for a fixed loan rate.
If your intentions are to
consolidate debts and replace high interest loans with one low rate mortgage than you may want to
consider refinancing. The loans being consolidated may include second mortgages, credit
lines, student loans, credit cards, consumer charge cards, or other debt you may have. In
many cases, debt consolidation saves you money by saving on taxes and avoiding paying high interest
rates. Mortgage loan interest is tax deductible whereas interest on consumer loans is not tax
deductible. top
What
are points?
An amount equal to 1% of the
principal amount of a mortgage loan. Discount points are a one-time charge assessed at
closing by lender to increase the yield on the mortgage loan to a competitive position with other
types of investments. For instance, one percent of a $100,000 loan is equal to $1,000.
top
What does it mean to “lock a rate”?
“Rate locks” are a way of
protecting from a possible rise in interest rates during the processing of your loan. With
some lenders, you can lock a rate up to 90 days. Generally speaking, if you choose to lock
for an extended period of time, the cost of the loan goes up. Furthermore, if rates improve during
the processing of your loan, you will still get the rate you locked. Some lenders may require a
home purchase contract before they will allow you to lock an interest rate. top
What
if I have little or no credit?
Use your good payment history
on rent and utilities, as well as credit obtained through family members or friends. Provide
a year’s worth of canceled checks to validate consistent monthly payments. This information
will become part of your application for the mortgage loan. top
What if I have a credit problem because of an unusual
situation?
If you normally pay your bills
on time but failed to pay because unusual or temporary situation, write a detailed letter
explaining your circumstances. Also provide supporting documentation with your letter such as
a doctor’s letter that will add credence to your case. The information will become part of
your loan application. Your lender will be able to overlook a credit problem if you can
provide a good reason for neglecting your obligation. top
What is Annual Percentage Rate (APR)?
The total finance charges for
a loan that is expressed as a percentage. APR takes into account the total cost of a
mortgage, including interest, closing fees, lender points, and other charges over the life of a
loan. top
What is a Conventional Loan?
A mortgage or deed of trust
that is not insured or guaranteed under a government insured program. top
What is a Convertible ARM?
The Convertible ARM has traits
similar to the ARM loan, but offers an option for the borrower to change the mortgage to a
fixed-rate loan during an early interest rate adjustment period. top
What is a Balloon Loan?
A note calling for periodic
payments which are insufficient to fully amortize the face amount of the note prior to maturity, so
that a principal sum known as a “balloon” is due at maturity. top
What is
a Buydown Loan?
A mortgage with a starting
interest rate below the interest rate stated on the Promissory Note. The lender lowers the
starting rate in return for an interest rate subsidy paid by the seller, buyer, builder, or
lender. top
What
is a FHA Loan?
The Federal Housing
Administration provides mortgage insurance for residential mortgages and sets underwriting
standards. The loan is partially guaranteed by the Department of Housing and Urban
Development and a private lender. top
What
is a FICO score?
A FICO score is a credit score
developed by Fair Isaac & Company. It is a credit scoring method to determine the
likelihood of credit users paying their bills. Since the 1950s, Fair Issac & Co were
pioneers in setting credit scoring standards and even today their method has become the most widely
accepted and reliable scoring method used by lenders in credit evaluation.
A credit score attempts to
condense your credit history into a single number. Credit scores analyze your credit history
by considering numerous factors such as:
- Late
payments
- The amount of time
credit has been established
- The amount of credit
used versus the amount of credit available
- Length of time at
present residence
- Employment
history
- Negative credit
information such as bankruptcies, charge-offs, collections, liens, etc.
Credit scores are calculated
by using scoring models and mathematical tables that assign points for different pieces of
information which best predict future credit performance. top
What
is a Good Faith Estimate?
When you file your application
for a loan, the lender must, under the terms of RESPA, provide you with a Good Faith Estimate of
settlement services that will likely incur. The estimate may be stated as either a dollar
amount or a range for each charge. top
What is an Adjustable Rate Mortgage (ARM) and how does an ARM
work?
An Adjustable Rate Mortgage
(ARM) is a mortgage or deed of trust, which allows the lender to adjust the interest rate
periodically as agreed to at the inception of the loan. The interest rate on an ARM is tied
to a market index and is fixed for a specific period of time. Once that period of time is over, the
interest rate is adjusted periodically (every 6 to 12 months) following the changes in the interest
rate of index that is associated with the loan. Examples of market indexes include, but are not
limited to, LIBOR, Constant Maturity Treasury, and 11th District Cost of Funds. If you are
interested in an adjustable-rate mortgage, it is important to discuss all of the features and
options of an ARM with our Mortgage Consultant so they can help you make an assessment of the best
ARM to meet your specific needs. top
What is Hazard Insurance?
Hazard insurance is an
insurance policy to protect homeowners against property damage. This premium prepayment is
for insurance protection for you and the lender against loss due to fire, windstorm and natural
hazards. If a catastrophe does happen, hazard insurance should cover the costs to rebuild
your home. Most Lenders often require you to get a policy before you buy or refinance a home
and usually require you to pay the first year’s premium at settlement. top
What is an Origination Fee?
A fee or charge for work
involved in evaluating, preparing and submitting a proposed mortgage loan. For FHA and VA
loans this fee is limited to 1% of the loan amount. top
What is
P.I.T.I?
Principal, Interest, Taxes,
and Insurance. The four components of a monthly mortgage payment. Principal refers to
the part of the monthly payment that reduces the remaining balance of the mortgage. Interest
is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are
paid into an escrow account each month for property taxes and mortgage and hazard
insurance. top
What is Prepaid Interest?
This amount represents the
interest that accrues between the close of your loan and the last day of the month in which the
loan closes. Interest on your loan after that date is included in your regular monthly
payments. top
What is Private Mortgage Insurance (PMI)?
Insurance written by a private
company that protects the lender against loss if you default on the mortgage. top
What is Title Insurance?
Insurance policy that is
issued by a company regarding title to real property. top
What is a Truth In Lending Disclosure?
The disclosure is designed to
give you information about the cost of your loan. top
What is
a VA Loan?
An independent agency of the
federal government that offers benefit programs to veterans. These programs encourage
mortgage lenders to offer long-term, no down payment financing to eligible veterans by guaranteeing
the lender against any loss. top
What kind of documentation will I need to provide the lender for
verification?
As each loan has different
variables, there is no single list of documents needed for all applicants. You should be
prepared to provide copies of the following documents to your lender.
Employment & Income
Data
- W-2 tax forms, past
two years
- 1099's
- Pay stub showing
current year-to-date earnings (two most recent stubs)
- Your job history and
any explanation of a job change within the past two years
- If self employed
(defined as owning 25% of a business or more), you need business and personal federal tax
returns (two years, including schedules), a current year-to-date profit or loss statement
and a K-1 on all partnerships
Assets
- Bank account
statements, past two months
- Investment account
statements
- Retirement account
statements
- Signed gift letter
and transfer of funds verification
Liabilities
- Credit Cards -
include account numbers and balances
- Auto loans and leases
- account numbers and value of car
- Explanation and
paperwork of any derogatory credit in the past seven years
- Explanation letter of
any derogatory credit (bankruptcy, collection, foreclosure or default)
- Student and personal
loans - include account numbers, monthly payments and balances
- Landlord address(s)
for past two years and rental amounts
Property & Realtor Information
- Name and contact
information of your Realtor (business card)
- Homeowners insurance
information
- Rental or lease
agreements
Residence & address for
past two years. top
What kind of things do I need to be aware of as a 1st time
home buyer?
Buying a home can be your
largest purchase in your life. Remember that you are in control of purchasing your home; so
don’t allow anyone to pressure you into making a purchase you are not comfortable with. Take
your time and evaluate all your options before committing to a contract or a loan.
- Here are some tips
and questions to ask yourself as you start on your first steps to home
ownership!
- Know how much you can
afford first.
- Yourself, as well as
the Realtor and Seller need to know if your can obtain
financing.
- You need to know
about available financing and special programs
- Is FHA right for
you?
- Are you eligible
for Federal
VA financing?
- What about No Money
Down financing?
- Are there any state
sponsored programs available?
- What about Zero Down
Rural Housing Programs?
- Can I borrow the down
payment?
- Are Gifts
allowed?
- Can the Seller pay my
down payment and closing costs?
- What are closing
costs?
If you require more
information to these questions or need help, call and speak to one of our Mortgage Consultants at
1-800-760-0695. There is no cost or obligation whatsoever to you. Service makes
us different and financing is made easy. top
What loan programs are available to me as a 1st time home
buyer?
Depending on your personal
circumstances, you may have several different loan programs available to you as a 1st
time home buyer Sundeck Mortgage can
offer you loans from No Money Down or loans up to ONLY 3% Down. We even have programs that
can finance up to 103% of your purchase price. So, call and speak to one of our mortgage
consultants at 1-800-760-0695 to find out which program is best for you. top
When should I choose a fixed-rate loan?
A fixed-rate loan offers a
borrower the comfort of knowing exactly what their payments will be, month after month, for the
life of the loan. Loan terms can range from 15, 20, 25, and up to 30 years. In a low-rate
environment, borrowers tend to prefer a fixed-rate product that can protect them from possible
interest-rate increases. top
When should I choose an Adjustable Rate Mortgage or ARM?
Generally speaking, an ARM
enables borrowers to secure a loan at an initially lower interest than a fixed-rate loan. This
means a borrower has lower monthly payments for a specific period of time when compared to other
loan options. Lower monthly payments may allow you to qualify for a higher loan
amount. top
What should I do if I continually struggle to pay my bills?
The best thing to do is seek
professional counseling to help you with your credit situation. Consumer Credit Counseling Services
is a nationwide nonprofit organization that provides credit counseling free or for a reasonable
fee. They can help you develop a solid plan for regaining control of your finances.top
What should I do to help financially prepare for a home
loan?
Here are a few tips to assist
you when it comes to applying for a loan:
- Use cash instead of
credit for your purchases.
- Avoid making any
large credit purchases—the added debt could impact your ability to qualify for a
loan.
- Contact creditors
immediately if you have a problem or concern about your ability to make payments on
time.
- Put money aside into
savings so you'll have a financial cushion in case of an emergency. top
When
should I pay points on a loan?
The decision to pay points on
a loan depends heavily on your circumstances. In certain situations, it can be very advantageous
for you to pay points on your loan. Generally speaking, the longer you plan to keep a loan the more
sense it makes to pay points to get a lower interest rate. One way to determine this is to
calculate the break-even point of how long you would have to keep the loan in order to save over
the cost of paying points up front. If you are comparing two loans with the same interest rate, and
one of them doesn't require you to pay points, then there is no reason to pay points. Another
consideration may be tax purposes. Points paid on a new home loan are immediately deductible as
interest.top
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ke Clinton, Kary and Mike - Clinton,
MA