Buying your new home is a serious venture. It can be an absolute pleasure or a massive headache. Your house is not just your home, it is a serious investment in the dwelling, the area, and your future.
Approach, expertise, and level of service can vary widely among real estate professionals. As your buyer's agent, we serve as advocates for your interests from before your first open house through your final settlement.
As full-time agents with a history of successful sales, you are our priority. And with backgrounds in marketing and finance, as well as an intimate knowledge of the local housing market, we’ll provide you with unparalleled client service.
Financing is always important when purchasing your new home. We have provide you a step-by-step guide to assist you in the process. We are with you 100% of the way.
A Green File should contain all of your important financial documents. Regardless of the loan type, lenders will need information about you. Make copies of financial statements: bank accounts, investments, credit cards, auto loans, recent pay stubs, and two years' tax returns.
Credit scores range between 400 and 800. 620 + is considered "good". 680 + is considered "premium" and may possibly help get you a lower interest rate. Below you will find the contact information for the 3 major credit reporting agencies to help you determine your credit rating. Ask your lender how to improve your credit score if you need to. Going forward, treat your credit like gold.
If you are buying real estate, try to accumulate funds towards your down payment, closing costs (appraisal, miscellaneous fees, escrow, title insurance, etc.), and expenses such as inspections. Furthermore, try to pay down existing revolving and high-interest rate debt like credit cards.
Now is not a good time to change careers, move your money around, or buy big ticket items. Lenders like stability. So if you are considering any major changes, it pays to meet with lenders and ask them how to proceed before you make any changes if you are tempted to buy a big ticket item, consider the following.
Today, lenders can be found through a variety of sources. In addition to calling on ads in the newspaper, you can also find and apply to lenders over the internet, and through referrals from your REALTOR. We would be happy to suggest lenders we have used successfully, who have proven themselves competitive and capable even with problem properties or poor credit.
Ability to explain things clearly and return your phone calls in a reasonable time period
Competitiveness of interest rates, costs & fees.
Availability of loan programs that suit your credit profile and desired property.
Access to local loan approval committee that understands the kind of property you are buying.
Today there are so many types of loans on the market that us beyond the scope of this page to list or explain them all. Your lender is the best person to help you select a loan program to suit your needs. Below is a summary of the three most popular loan types we see in practice; for more detailed information click the link at the end of this page.
The fixed rate loan assures your monthly payments will start the same over the life of the loan, which is typically between 15 and 30 years. Fixed rate loans may be best if you intend to hold the property for a long period of time, say over 7 years.
ARM's may be suitable if you plan to sell or refinance your home within the next few years. The starting interest rate is typically lower than a fixed rate loan, saving you more initially. However, it is important to understand the index, the readjustment interval, the capitalization rate and downside risks of an ARM before making a final decision to use this type of loan.
Also called Hybrid Lonas, these loans can offer fixed interest rates for the first 3, 5, 7 or 10 years which the interest rate adjusts with the market every 6 months or year thereafter.
This cost, typically a few hundred dollars, is changed to cover the lender's work to evaluate your ability to repay the loan. Some lenders will credit this back to you upon closing.
The APR, or Annual Percentage Rate, is the sum total of all your borrowing costs expressed as a percentage interest rate changed on the load balance.
When mortgage companies are competing by offering lower interest rates, they may charge you a one-time pre-paid interest payment calculated as a percentage of the loan. Called points", this may range from 0.25% to 2% of the loan balance and is usually paid up front. Points are tax-deductible; consult with your tax advisor.
Lenders hire experienced, often independent appraisers to evaluate the property's purchase price, condition, and size compared to similar recent neighborhood sales. This helps ensure the purchase price is not too high and gives the lender more confidence in getting repaid in the event they are forced to sell the property if the borrower defaults.
Expect to see various charges incurred in the processing of your loan which might include notary, courier, and county recording fees.
These vary widely, so be sure you know in advance if your lender will charge a penalty if you refinance or sell, and the certain period during which the penalties apply.
The pre-qualification process can be completed fairly quickly, based on less information than is required for getting pre-approved. While it is fast and does help, a pre-qualification letter is an opinion from a lender of the maximum amount of real estate you can qualify for. In a competitive seller's market, an offer from a buyer with a pre-qualification letter could lose out to a person who is pre-approved.
There are several benefits to going the extra mile and getting a pre-approval letter. First of all, you will know exactly how much real estate you can afford. When you find a property you want to buy, your offer will be better positioned than someone less prepared. Finally, being pre-approved is more efficient; it reduces the amount of time it will take your lender to fund your loan. Be prepared to provide comprehensive documentation, which the lender may independently verify, including but not limited to:
There are standard forms to be completed when applying for a loan. Some mortgage brokers keep these on their website so you can fill out and submit the forms online. The information will be verified and used to qualify you for your loan, so take time to answer questions accurately.
The mortgage broker will need copies of the documents you began gathering in the first phase of the loan process, including:
The lender will have an analyst, usually called an "underwriter", crunch your numbers and verify your documentation to confirm your ability to repay the loan. Once you are in contract on a property, there may also be a loan approval committee which will meet to review the underwriters' conclusions regarding your creditworthiness and to evaluate the property on which they are lending. This is called the underwriting process, and questions are bound to arise.
When the lender is ready to "close" your loan, or "fund" it, your real estate agent and your mortgage broker will have you sign the final loan documents. Signing will typically take place in front of a notary or an escrow officer. Ask your mortgage broker if there is anything you need to do to prepare for this, such as bringing a photo ID or perhaps a cashiers' check if you are purchasing real estate. Allow yourself enough time to review the documents for accuracy.
If funds are being wired; "Wiring instructions" direct the electronic transfer of money between financial companies. If possible, arrange to have the wiring instructions in place ahead of time and checked for accuracy by both the sender and recipient of the wire. It is critical that their instructions be exact, and even so, delays are all too common.
Your mortgage broker will probably call you to confirm that the money has been transferred and the loan has closed. Always follow up with a phone call to confirm that your loan funds went where they were supposed to go. It is a good idea to keep records of this critical phase of the transaction once completed.
Compass
Jay Barry Group
