I
have always strived to make the process easier for my clients. Purchasing a
home is the most important financial investment you will make in a lifetime.
Achieving the American Dream of Homeownership should be one in which we
carefully guide you through the process so that it is a positive experience
that you will remember. Here are a few questions that first-time buyers
typically have…
1. At
what point in the process should I apply for a mortgage? The best time to
apply is before you purchase a home. Getting an actual pre-approval will give
you more negotiating power with the seller as well as make the process smoother
because you will know within what price range to be shopping.
2. How
long will it take for our loan to be approved? After you have submitted
your application, loan approval typically takes just a few days if the
documentation we ask to be provided (see form attached) is complete. The more
complete the information, the more quickly we can act.
3. What
is the process after the loan is approved? Assuming you have a sales
contract signed for a new home, the next step is to make sure all conditions
are clear. Many of these conditions are standard and are provided by third
parties, such as obtaining an appraisal and clear title. The quicker these
conditions are received, the smoother the settlement process.
4. What
is the difference between a pre-approval and pre-qualification? A pre-qualification is an opinion on whether
you are qualified for the mortgage and does not mean that the information
provided has been verified or the file has been underwritten. A pre-approval
means that the relevant information has been verified and the file has been
underwritten and approved. The file typically would be approved subject to
writing and submitting a sales contract, satisfactory appraisal on the property
selected and locking in a rate and loan program. We are one of the few lenders
that provide actual underwritten
pre-approvals.
5.
When can I lock in a rate on the loan? Typically you
can lock in the rate after the application is complete and after a sales
contract is ratified. Rates change daily and sometimes more than one time per
day and we can keep you informed as to how the markets are changing.
6.
How much money will I need at closing? You will need
money to cover the down payment and closing costs and escrows. The closing
costs are itemized on the Good Faith Estimate of Closing Costs, a government
required form we will provide. From this number, you can subtract your deposit
that is being held by the Realtors and any closing cost credit paid for by the
seller.
7.
Can I borrow the money I need for closing, for example, place a charge on my
credit card? We advise you not to borrow any money until you
close on your home, at least not without talking to us first. A car or
furniture purchase could change your qualification status.
8.
What is included in my mortgage payment? We
refer to the payment as the “PITI.” This stands for Principal, Interest, Taxes
and Insurance. Principal and interest refers to the payment on the loan and
taxes and insurance is payment for bills that will be due each year. We refer
to these as escrows, or money you put aside (or escrow) for bills to pay due.
Insurance is typically for a “homeowner’s policy” to protect your house but
there may also be monthly mortgage insurance charged by FHA or conventional
lenders. Also many homes have homeowner association fees that cover charges for
common areas such as pools and tennis courts.
9.
Will I get a copy of the appraisal of the property? Yes, you will be provided with a copy. If there is a “problem” with the
appraisal, for example, if the value is less than the sales prices, you will be
notified promptly.
10.
Will I get a copy of my credit report? Yes, we will
be able to provide you with a copy of your credit report. The Fair Credit
Reporting Act requires that this information cannot be shared with other
parties to the transaction and therefore it must be provided to you directly.
11.
If I have a question, how do I contact you? While
most of our correspondence would be by e-mail. It is important that you get all
your questions answered, so please to do hesitate to give me a call.
Our
mission is your satisfaction!
Mike Ervin
Senior Mortgage
Banker
mike@mikeervin.com
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