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HOME PURCHASE QUALIFIER Home buying can have so many questions. You have come to the right place however, we have the answers for you!
Can a lender sell my loan?
Yes. An active secondary mortgage market exists in which lenders and investors buy and sell pools of mortgages. If another company purchases your mortgage, it assumes all terms and conditions. A new lender cannot change the rate, payments, or any other aspect of the agreement. You will only have to send payments to the new loan servicer.
How important is the real estate location?
Location is key. Factors like crime rate, public school ratings, daily commute times to surrounding metropolitan areas, as well as the vicinity to local parks, libraries, swimming pools, sport arenas, churches, restaurants and shopping centers are essential in the price valuation of real estate. It’s best to consider the location as much as the condition of a home when you are looking to make a purchase.
How can I raise my credit scores?
Raising a credit score is not always easy and not something that can be done overnight. There are several credit best practices that will raise your rating over time: Pay your bills on time. This is extremely important. Collections and late payments can lower your credit scores. Reduce your credit balances. Maxed out credit cards will lower your credit score. Don’t apply for credit often. This reflects poorly on you and your rating. Establish credit history.
What's the difference between pre-qualified and pre-approved?
Pre-qualification is a determination of the loan amount you’re likely to receive. It is not a guarantee of approval. To obtain pre-qualification, you usually are interviewed by a licensed loan officer who determines the pre-qualification amount. You will be issued a letter with this information that you can present when making an offer on a home. It’s important to understand that pre-qualification does not imply any obligation from the lender that you will be approved. Pre-approval is more thorough than pre-qualification. To be pre-approved, you must submit an application and verify your credit and financial history. After you receive your pre-approval certificate, you’re in a stronger position to close earlier and negotiate a better price. It’s highly recommended that you seek pre-approval if you are shopping for a home.
Should I move my finances to improve my chances for loan approval?
Although it may seem intuitive to move money around in accounts to show financial strength, this is actually not advisable. All facets of your income will be considered when applying for a loan. It’s best not to make any financial changes that could alter your eligibility, especially placing money from untraceable sources into your accounts. Additionally, don’t change your employment during the home loan process. Steady employment can be a factor in determining loan qualification. Lastly, large purchases such as cars, appliances or furniture can negatively impact the outcome of the loan.
What can I expect from interest rates?
Interest rates vary depending on the program you happen to be working with as well as credit scores, down payment amount and few other factors. We can help you figure out the best course of action as well as educate you on how you can work with these rates.
How much money do I need to put down?
In most instances, as well as the program that you are a part of, your down payment may be at a minimum of 3%. Programs vary depending on whether you are a first time homebuyer as well. Talk to us about what program is right for you and we can make sure you are putting the correct amount down on your next home!
What documentation do I need to provide in order to get my loan approved?
• Form 1003 — The residential loan application — including the attached Fair Lending notice, loan info sheet, and credit authorization.
Note: Do not use whiteout on this paperwork. Mistakes should be crossed out and initialed.Copies of W-2s or tax returns for the previous 2 years.If you own rental units, provide the most recent rental agreement and tax returns for previous 2 years. • • Your last 3 bank statements along with the most recent statements for any mutual funds, IRA/401(k), or stock accounts. • Settlement agreement and divorce decree (if applicable).Letter explaining how you plan to utilize refinance proceeds if you’re seeking a cash-out refinance. • Non-U.S. citizens must present their Green Card or H-1 or L-1 visa.If you’ve filed for bankruptcy, present a schedule of creditors, discharge notice, and filing. • If you’re applying for a second loan, include the first mortgage note. These documents may not be all-inclusive, but by having these on hand, you will expedite the application.
Points are prepaid interest that you can pay up front. You can pay points to get a lower rate on both fixed rate and adjustable rate mortgages, but the points charged to reduce the rate may vary depending on the type of loan. One point is equal to 1% of the mortgage amount. (Example: $100,000 mortgage amount = $1,000 point)
What should I look for in a lender?
The interest rate isn’t always the most important factor in selecting a mortgage. You want to make sure you’re doing business with a reliable, reputable business. A trustworthy lender will be able to provide all of the details of your loan, including pre-approval, in writing. When shopping for a mortgage provider, don’t forget to ask friends and family members for recommendations. Although online reviews are available, they may not be as thorough as hearing feedback from the people you know. It’s also reasonable that if the people closest to you were happy with their experience, you will be, too.Also, make sure that you understand the full cost of the loan and that you feel comfortable with all of the terms. For instance, pre-payment penalties, a large down payment requirement, or larger monthly payments may cause the loan to be less than ideal — regardless of the interest rate.
What will be considered during the loan process?
Proof of Income – Find and make copies of your pay stubs. Tax Information – Gather your W-2s, 1099s, and tax returns for the last 2 years. If you’re self-employed or an independent contractor, you’ll be required to provide your 1099-MISC information. Credit Details – We’ll perform a credit check when you apply. Debt Documentation – You’ll be required to provide documentation on your outstanding financial commitments. Gather materials on your current mortgage, car loans, student loans and any other debts.
What will be considered during the loan process?
FICO stands for Fair Isaac Corporation. This company is a pioneer and leader in credit scoring. Your FICO score is a number that tells creditors how likely you are to pay off your debts.FICO and the credit bureaus do not disclose their exact computation methods. However, most credit scores are calculated through models that assign points to different factors of your credit history to best predict future performance. There are many commonly analyzed factors in your credit history, including:
• Payment history • Employment history • How long you have had credit • How much credit you have used compared to how much you have available • How long you’ve lived at your current residence • Negative credit/financial events such as collections, bankruptcies, charge-offs, etc.
Why do I need a home inspection?
Inspections are important to understand the condition of the home. They can also be helpful when it comes time to negotiate with the sellers, in terms of lowering the price of the home, or adding service stipulations to the contract.
How does the pre-approval process work?
We send you a needs list that consists of the necessary documentation that we need to help process and adequately determine the loan program that is best suited for you. The needs list details all the info needed for the process such as income, assets, etc. The turnaround time for a pre-approval is less than a day so you could be looking for your next home faster than you think!
How do I know if I qualify for a VA loan?
Whether you are active military, a veteran or in the reserves you are able to qualify for a VA loan. You are unable to qualify for a VA loan if you have been dishonorably discharged however.
Does my down payment have to be all my own money?
No! We are able to assist you in your loan if you are able to obtain a gift from a family member. Now, when we say family member, we do not mean your best friends, a nice boss or your fiancee. These family members have to be immediately related to you in some way for the gift to be accepted.
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