Your Questions About Mortgage Loan Process

Daniel asks…

Pre-approval for a mortgage loan?

Husband and I are a young couple, interested in purchasing a house. We have an idea of what we want, but the main concern here is feeling ready. Will it hurt our credit if we were to get pre-approved NOW… even if we decide to wait another few years to purchase?

John answers:

Being pre-approved for a mortgage loan at this early date would not be of any great benefit 1-2 or perhaps 3 years from today. Getting pre-approved would not be of any great impact on your credit score.

Qualifications would be changed. Requirements might be very different and what you are able to purchase now you might not be able to purchase in 2 years or so.

This would be a waste of your time as well as that of several of the mortgage professionals that would need to be involved in the process of getting you pre-approved.

You might monitor your credit by getting an annual credit report from the three reporting agencies. You might also make sure you pay your debts as agreed as not doing so would cause a negative ding to be placed on your credit report.

One other key thing is to remain employed and not change career fields.

If you would want to be pre-qualified by a mortgage loan officer this might suit you better as you would not be having an entire chain working to get you pre-pproved with you not in the market to purchase as of yet.

If you have the ability to purchase now, you might be better off. The housing market is a buyer’s market. The interest rates are extremely low. There are FHA mortgage programs that require as little as 1% down.

You might not be able to purchase your dream house, however, you would be able to move after occupying the house you buy. You could use this house as a rental, thus placing you in a position to have additional income for your retirement.

If you purchased a three properties over the next six to eight years, you would collect the rent which would pay your monthly mortgage. This real estate crises would not last for much longer. After 30 years you could then sell your property at the appreciated cost and keep the proceeds as retirement income.

You could increase your revenue by purchasing a 4 unit apartment. You would be required to stay in one and would be able to rent the other 3 to potential tenants. 4 units are counted for mortgage purposes the same as a single family house.

It would be better to plan now and take advantage of the current mortgage situation as well as the lower interest rates.

A real estate guru once told me, “It is better to buy real estate and wait as oppose to waiting to buy real estate.”

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

“FIGHT ON”

Chris asks…

will i get approved for a Mortgage?

I was planning to buy my first home, the list price of the house is $260,000. I have 40,000 for a down payment. My credit score isnt to bad, its at 691 with equifax. I am currently working for the last 3 years. What are my chances for a mortgage approval? thx

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, 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 USDA, 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”

Sandy asks…

Mortgage assumption process?

My husband and I bought a house almost two years ago with my father as a co-signer. He wants off the mortgage and when I call the lender the suggested a assumption process instead of re-financing. What is this and is it a good idea?

John answers:

This is not really an “assumption” since you are already on the mortgage. That means that it can be an easy process. It is actually called a “novation”. Dad will be removed from any liability. He will be happy.
They already have all your loan applications from 2 years ago. They might not require anything else if your payments have been on-time for 2 years. The only question you have to ask your lender is “How much will you charge in fees for the loan transfer”. If you do not get a clear answer, do not continue. Get it in writing. You are not being difficult when asking this.

Richard asks…

who offers the best fha loans?

who offers the best fha loans?

John answers:

All FHA lenders would have to abide by the same criteria. Just pick a local lender that is authorized to do FHA mortgage loans.

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, 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 USDA, 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”

Mary asks…

What is the best bank for a home mortgage loan?

John answers:

There is no best bank for getting a mortgage loan. You loan will be based on your credit score and credit report.

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.

Immediately after your mortgage loan is closed and you sign your mortgage loan doc, your mortgage loan will be sold to a mortgage investor, therefore it make no difference.

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

“FIGHT ON”

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