Your Questions About Mortgage Loan Process

David asks…

my ftco is 573 and i dont have d/p money but i need a mortgage loan?

I am looking for a mortgage loan, my credit is poor but i am working in fixing it, my fico is 573, i have
a secured income, i can make the monthly pmnts with no problems. my email is fperez811@att.net

John answers:

Consider applying for a FHA mortgage loan. They have some programs with a down payment as low as 3.5%. This down payment might be obtained from family, friends or charity organizations. The credit requirements are not as stringent as those of a conventional lenders.

Buying a house is a step by step process, this is the first step you should take in order to purchase a house. The rest of the steps will fall in place, no matter the type of property you are purchasing.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one. With a VA mortgage loan you are not required to have a down payment, this will save you on closing cost.

He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

#1 One month of pay stubs for each person that will be on the mortgage.

#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.

If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

Make sure your mortgage broker explain all your options so you may make an intelligent decision.

What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

So select the best option for you and your financial situation.

You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

I hope this has been of some benefit to you, good luck

“FIGHT ON”

Helen asks…

203(k) loan examples?

Can someone give me an example of the 203(k) loan process? For example, I am looking at a property that is for sale at $14,900 that needs a total rehab. Would the loan cover costs for repairs? After repairs are made, how is the new mortgage determined?

John answers:

What is an FHA 203k loan?
An FHA 203k loan is basically the same as a regular FHA [called a 203(b)], but with a twist. An FHA 203k loan permits home buyers to finance repair/improvement money into their mortgage to repair, improve or upgrade their home. With this loan option, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser or home buyer preferences, such as energy efficient improvements, replacement of existing counter tops, appliances, floor coverings, etc. There are two types of FHA 203k Loans: Standard/Rehab (minimum $5,000 up to FHA maximum loan amount) & the Streamline ($0 – $35,000…up to FHA maximum loan amount). The FHA 203k Rehab loan is more like a construction project, and the FHA Streamline 203k Loan is for more minor improvements.

An over-simplified example: Purchase price is $14,900. Upgrades/Repairs/Improvements will cost $15,000. Borrowers loan amount is $29,900 (not to exceed FHA maximum loan amount).

What are the recommended steps to purchase a property using the FHA 203k Loan?
There are NO required steps or any specific order that items must be completed. However, to ensure a smooth real estate purchase, these are the recommended steps to purchase a home using an FHA 203k loan:

?The Home Buyer/Borrower selects an FHA-approved 203k lender and real estate agent knowledgeable with the FHA 203k loan and then applies for the loan.
?The Home Buyer/Borrower locates a home and executes a sales contract after doing a feasibility study of the property with their real estate agent and/or 203k Consultant. The contract should state that the buyer is seeking an FHA 203k loan and that the “contract is contingent on loan approval based on additional required repairs by FHA or the lender or the borrower” or the “contract is contingent upon buyer(s) obtaining an FHA 203k loan without conditions”.
?Then, during the inspection period, the Home Buyer/Borrower has 2 options: 1) have his/her lender order the appraisal immediately after contract acceptance or receive a home inspection from an FHA inspector or receive a feasibility analysis from a HUD-approved 203k consultant to determine what are the minimum repairs/improvements required to purchase the home and then obtain a loan based on that information (may require a 2nd appraisal) OR 2) get a detailed proposal(s) showing the scope of work to be done, including a detailed cost estimate on each repair or improvement of the project and then have the appraisal performed to determine the after-renovation value of the property. This choice is made by the home buyer/borrower. A HUD Consultant, if required/needed, is also used during this period. The appraisal, contractor’s proposal and the 203k Consultant’s work write-up are submitted to the lender for approval.
?If the borrower passes the lender’s credit-worthiness test, the loan closes for an amount that will cover the purchase or refinance cost of the property, the remodeling costs plus any required contingency reserves, any allowable closing costs and mortgage payments (only on 203k Rehab–up to 6 months).
?At closing, the seller of the property is paid off and the remaining funds are put in an escrow account to pay for the repairs/improvements and any allowable closing costs and/or mortgage payments during the rehabilitation period.
?You now own the home and can begin the renovations.
?Escrowed funds are released to the contractor(s) during construction through a series of draw requests for completed work. To ensure completion of the job, 10% of each draw is usually held back; this money is paid to the contractors after the lender determines there are no liens on the property.
?For the 203k Streamline – The rehab work must start within 30 days after closing/funding, property needs to be livable within 30 days after closing, work may not cease for more than 30 consecutive days, the owner/borrower may not be displaced from the property for more than 30 days, and all work must be completed within 6 months after closing. For the 203k Standard/Rehab – The rehab work must start within 30 days after closing/funding, the owner/borrower is permitted to be displaced from their home for more than 30 days, work may not cease for more than 30 consecutive days, and all the work needs to be completed within 6 months.

Thomas asks…

Getting a mortgage – where do I start?

Please can anyone point me in the right direction? I would love to buy a house but don’t know where to start. I am getting an inheritance soon, around 20k so want to use this as a deposit. Trouble being, I am in a job which I hate – on about 17k a year but my boyfriend is unemployed at present.

I am thinking of changing jobs too (self employed but with an on-going contract with someone)… is it really silly to even think about a mortgage now? It’s just that house prices seem to have come down a lot recently – also, I think I could end up buying a 3 bed house and end up paying less per month than what I pay renting a 2 bed.

Any help or advice would be greatly appreciated. Thanks

John answers:

Buying a house is a step by step process, this is the first step you should take in order to purchase a house. The rest of the steps will fall in place, no matter the type of property you are purchasing.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one. With a VA mortgage loan you are not required to have a down payment, this will save you on closing cost.

He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

#1 One month of pay stubs for each person that will be on the mortgage.

#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.

If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

Make sure your mortgage broker explain all your options so you may make an intelligent decision.

What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

So select the best option for you and your financial situation.

You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

I hope this has been of some benefit to you, good luck

“FIGHT ON”

Mandy asks…

New Home Mortgage-best place to shop?

We are in the process of purchasing a new home and don’t know if to go with a Bank mortgage or find a home mortgage company. Which would be the best? thanks for all info. and your time.

John answers:

Buying a house is a step by step process, this is the first step. Once this step is taken the others will fall in place for you.

In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.

He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

#1 One month of pay stubs for each person that will be on the mortgage.

#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

#3 Two years of federal income tax along with the W-2 that match.

Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.

If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

Make sure your mortgage broker explain all your options so you may make an intelligent decision.

What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

So select the best option for you and your financial situation.

You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

Your mortgage broker will now order an appraisal to show proof of the property value.

The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.

After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

I hope this has been of some benefit to you, good luck

“FIGHT ON”

Carol asks…

what does a mortgage loan operations specialist do?

what are their responsibilities?

John answers:

A loans operations specialist would be someone who works preparing mortgage documents and portfolio held mortgages. They would also process payments between customer and seller manage your mortgage portfolio and deal with customer queries.

Hope this helps!!

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