Online mortgage USA
mortgage checklist
Definition: A mortgage
is a long-term loan through a bank or other financial institution,
or even through the seller of the property. The house and/or
property serve as collateral for the loan.
|
Step 1: Find a mortgage that’s
right for you.
The most common types are 30-year and 15-year fixed mortgages
where the interest rate is fixed for the term of the loan. Other
types include Adjustable Rate Mortgages (ARMS) where the interest
rate can vary over time, hybrid ARMS, jumbos, assumables and
seller financing. |
Step 2: Determine how much house
you can afford.
Consider: equity in your current home (if you own), amount you
can put down, monthly payments you can manage, real estate taxes,
closing costs and insurance (definitely homeowners insurance
and probably Private Mortgage Insurance – PMI –
if you put less than 20% down). Monthly payments on debt obligations
including items such as credit card bills, alimony, child support
and student loans should not be more than 36% of your pre-tax
income. |
Step 3: Check you credit.
A potential lender will check your credit report immediately.
It’s best to clear up any credit problems before you apply
for a mortgage. Get your credit report from Equifax (800-685-1111),
Experian (888-397-3742) and Trans Union (800-888-4213). |
Step 4: Pre-qualification and pre-approval.
If you haven’t found a home yet, consider getting pre-qualified
(a lender will review your financial history before you find
a home) or pre-approved ( a lender will check your credit and
provide you with a letter stating that you’ve been pre-approved
for a certain amount). Both of these will help improve your
purchasing power. |
Step 5: Gather the necessary paperwork.
See list below to get an idea of what you’ll need. |
Step 6: Find a lender.
Finding the right lender is an important step to ensure a positive loan
experience. We make this task easy.
and fill out the short information form and we’ll have one or more
licensed and professional mortgage brokers or lenders contact you to
discuss current loan rates and availability specific to your
circumstance. While on our site we invite you to check current interest
rates and some of the other tools we offer to assist you in making an
informed decision. Remember that the lowest rate doesn’t always mean
it’s the best loan for you. In addition to the annual percentage
interest rate, check on points (pre-paid mortgage interest which will
increase your upfront costs) and other fees associated with a given
loan. Compare mortgage loan offerings and talk to several lenders
before you apply for your loan. |
Step 7: Assess your potential home.
Hopefully, you’ve found your dream home by this time.
Be sure to thoroughly evaluate the home to make sure it’s
what you really want. An appraisal is part of the mortgage process
and will ensure that you’re paying the appropriate price
for your home. |
Step 8: prepare for closing.
Make sure the closing is scheduled before your loan commitment
and any rate lock-in will expire. And be sure there is enough
time to finish any loan documentation and complete any home
inspections or repairs. |
Step 9: Closing day!
Congratulations, you’re about to own a new home! At the
closing you will have to sign legal documents and pay closing
costs (these could include surveying, taxes, insurance, attorney
fees, agent fees, points, loan origination fees, PMI and balance
of down payment). |
Step 10: Servicing the mortgage.
At closing, your mortgage lender must tell you who will be servicing
or administering, your mortgage loan. Traditionally, the mortgage
banker would service the loan for the life of the mortgage on
behalf of the investor. However, the servicing may be handled
by a third party. |
|
|
| W-2 forms from the
previous two years |
| Federal tax returns
from the previous two years |
| Recent paycheck stubs |
| Documents showing other
sources of income, which could include second jobs, overtime,
commissions and bonuses, interest and dividend income, Social
Security payments, VA and retirement benefits, alimony, and
child support |
| A complete list of
your creditors, such as credit cards, student loans, car loans
and child support payments, along with minimum monthly payments
and balances |
| Investment records
including mutual fund statements, real estate and automobile
titles, stock certificates and records of any other investments
or assets |
| Canceled checks for
your rent or mortgage payment |
Maximum
monthly debt obligation based on $50000 annual salary |
|
|
|
| Down the road… |
Removing PMI:
You should be able to remove PMI once the equity in your home
reaches 20% of the property value either because the loan
balance has been decreased below 80% or because your home
has appreciated in value. |
Prepayment:
The motivation for prepaying a mortgage is simple-you
save money on interest and it can add to a lot of money. You
can create a prepayment schedule yourself or the mortgage
servicer can set up a formal biweekly pre-payment plan. Be
sure to consider the tax implications of prepayment-prepaying
reduces mortgages interest, which is tax deductible. But that
may not be beneficial in your tax bracket. |
Refinancing:
In today's market, if you're planning to stay in
your home for a while, and you find a good deal on refinancing
costs, it may be worthwhile to refinance with as little as
a 0.5% lower rate, refinancing involves many of the same steps
you took when obtaining a mortgage the first time around. |
|
Points
or lower interest rate? 30 year $100,000 mortgage |
|
Rate |
Points |
Monthly
Payment
|
Cost of Points
(paid at closing)
|
Total Interest |
Comments |
|
|
$632
$ 699
|
$3000
0
|
$127,544
$151,717
|
If low monthly payments are your priority
and you have the cash for points, then pay the points. But
you may want to consider an alternative investment for your
cash instead of paying the points upfront. |
|
TIP: Paying points usually lowers your
interest rate. If you plan on staying in your home for a while
consider paying the points |
|
Economics
of Buying a Home |
|
Home price |
= $150,000 |
Cash down payment |
= $15,000 (10% down) |
Mortgage |
= $135,000 |
Loan APR |
= 7% |
Term |
= 30 years |
Monthly loan payment |
= $896.16 |
Monthly PMI payment (will vary –
approximate) |
= $56.25 |
Total monthly payment |
= $954.41*
|
|
(*allow for additional monthly costs such as homeowners insurance
and real estate taxes).
Seller usually pays agent commission.
Additional costs include: closing costs, agent fees (if selling
your home), insurances, legal fees, points, application fees,
etc. |
About
ARMs (Adjustable Rate Mortgages) |
| 1. If you’re
going to be moving or only living in the house a
few years, lower-rate ARMs are a good option. |
| 2. After the
initial fixed period, most ARMs adjust every year
on the anniversary of the mortgage. Some ARMs adjust
every three years, based on yields on the three-year
Treasury securities. |
| 3. On an adjustable-rate
mortgage, there is usually a maximum annual increase
of two percentage points and a lifetime cap of six
percentage points. Note: *ARMS can be tempting,
but they come with some uncertainty. That’s
why more than 75% of homeowners opt for a fixed-rate
mortgage. You need to ask if you can afford the
highest possible payment in such a worst-case situation. |
|
|
|
SAVE
MONEY with GoApply.COM!
We’ll help you find the best mortgage for you!
|
Interviewing Mortgage Lenders – compare several
lenders before committing to one.
This worksheet provides you with key questions to ask potential
lenders.
There’s also space to take notes so that you can compare
each of the lenders you interview.
Contact information can be recorded in the section below. |
|
Notes |
Notes |
Notes |
| |
|
|
|
| 1. What is the interest rate on this mortgage?
To know exactly what you’ll be paying in interest
over the life of the loan, you need to know the rate.
This is the single most important figure to obtain. |
|
|
|
| 2. How many discount and/or origination points
will I have to pay to get this rate & loan? Lenders
can charge points that lower your interest rate and points
that provide no benefit whatsoever to you. Find out how
many you’ll be expected to pay for the loan and
which kind of points they’ll be. |
|
|
|
| 3. What closing costs
will be charged on this loan & will you provide the
“good faith estimate” of those costs up front?
Many experts say that you shouldn’t
use a lender or broker unless that person will provide
a good faith estimate up front. |
|
|
|
4. When can I lock in the interest rate &
what will it cost me? The
interest rate of the mortgage you’re applying for
may go up or down between the time you apply and the time
you close. Ask if there is a fee for locking in the rate
and if you can also lock in points.
|
|
|
|
5. Is there a prepayment penalty on this loan?
Find out the duration of any penalty
period and how the fee would be calculated.
|
|
|
|
| 6. What is the minimum down payment required?
Depending on the amount of your
down payment and its relation to the price of your home,
you might be charged different interest rates or quoted
different loan terms. Loans made at high loan-to-value
ratios can cost more than loans with larger down payments. |
|
|
|
| 7. What are the qualifying guidelines for this
loan? The qualifying guidelines
can relate to your income, employment, assets, liabilities
and credit history. Some first-time home buyer programs
and government-sponsored loans have easier qualifying
guidelines. |
|
|
|
| 8. What documents do I have to provide?
You will need to provide proof of
income and assets in order to get a mortgage loan as discussed
earlier. Find out what documents will be required in your
particular situation by asking your lender. |
|
|
|
| 9. How long will it take to process my application?
This varies from
lender to lender. Get a realistic estimate and use that
to figure out how long a rate lock you’ll need. |
|
|
|
10. What might delay the approval of my loan?
If you provide the lender
with complete, accurate information, everything should
go smoothly. However, there could be a delay if the lender
discovers credit problems, which is why it is critical
to get your credit in order.
|
|
|
|
|
LENDER
CONTACT INFORMATION |
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
Links:
ip mortgage
#1 mortgage
mortgage news and search
mortgage news
mortgage news
mortgage news
mortgage news
Greenspan: All is well ... maybeGreenspan: All is well ... maybe In latest speech the Fed chief tried to hit a calming note. Still, he had some caveats. March 11, 2005: 10:04 AM EST NEW YORK (CNN/Money) - Fed Chief Alan Greenspan mostly reassured us that our massive trade deficit will gradually correct over time without a big crash in the dollar. But he left us with a couple of big caveats in a... entire article: Greenspan: All is well ... maybe
mortgage news
More links: mortgage
| |
