Your Questions About Mortgage Loan Process

James asks…

How long does the mortgage loan process take?

21 days and we still have no idea what’s going on. The sellers are going to want to know what is going on as well.

John answers:

Your loan officer should be giving you updates. There is no reason you should not know what is going on. The process may take 30 days but that has nothing to do with no communication with loan officer. Call your LO tomorrow & get some answers.

William asks…

Call me silly, but doesnt your mortgage loan sound like?

You are *giving* not “receiving” the loan?
Go with the flow, how can someone give their house to the bank if the bank is paying for the house?
It would not be theirs to give.
Go with the …How can you give something if you do not already own it? If you did already own it, why would you need to give it away to pay for it?
looks as if you need to “polish up” on your understanding as well.
Go with…A car loan is not a fair example because you do not give a “promise to pay”. Does the car dealer give you title/ownership of the car so you can give it back to him until you pay off the loan?
Steve, you wrote “you receive the mortgage“…mortgage defines as dead pledge. Ill just use the word “pledge’ for simple understanding…..Now read “You receive the pledge’. Your statement indicates homeowner is receiving, not giving the pledge.
steve, you wrote…”a lien against the home which *acts* as security…” If a lien is *acting* as security, what is the real security?
Steve does homewoner give bank payments or….deposits?
If payments, then why is a statement sent and not a bill?
Bdancer, I understand mortgage is a dead(mort) pledge(gage). A dead pledge because homeowner is pledging their credit, something of no value until they work to *create* the value for the payments.
Loan and credit are opposite…
With a loan, value is given and expected in return with interest.
But with credit, the value does not come from the credit, it comes from the payments.
Homeowner is working to *create* the value required to recieve their pay.

No indication of value on the contract, and ther promise to pay indicates credit. This means homeowners are paying interest on their own credit, which is just a valueless number representing what the homeowner can pay. Other words, interest is paid on nothing. homeowner has to work to create value for the interest payments on a loan that doesn’t exist.
This would explain the very large amount of profits and bonuses the institutions collect. The institutions are ‘;cashing in” on homeowners credit without losing or giving up an
cont…or giving up anything of value. But dont take my words as 100%accurate, research for yourself.

John answers:

No, you receive the mortgage, you give the bank payments. And contrary to an earlier answer, yes, even with a mortgage you do own your home. The bank does, however, have a lien against the home which acts as security for the mortgage. Title remains in the owner’s (the buyer’s name) which means that legally, the buyer not the lender own the home. However, the title cannot be transferred until the lien is released, which releases the bank’s security interest in the house.

This is why a lender cannot just “take” a house but must go through a formal foreclosure process – and also why a number of banks are now in trouble for robo-signing papers that illegally moved the foreclosure process along.

And back to the original – if you “gave” the loan, that would mean you are giving the bank money up and receiving payments back.front

Donald asks…

What is the best VA mortgage lender? ~In Indiana?

I have found that banks can do mortgage loans, but are quite unknowledgeable about how they work, and the requirements. I am looking for one that specializes in VA home loans. Also my husband has a better credit score than I do, which he is the vet, so does mine matter as much in the loan process?

Thanks in advance!

John answers:

In applying for and being approved for a VA mortgage loan credit scores are not used in the approving process of obtaining a VA mortgage loan. You, as the spouse, may be added to the VA mortgage loan application with or without provable income.

Your combined income would increase the loan amount a mortgage lender would lend you to purchase a house. The amount of money you would be approved for would be based on the amount of debts on your credit report and the amount one would earn to pay these debts. A formula would be used by your mortgage underwriter to come up with a debt ratio, based on these two items. Your debt ratio should not exceed 39%. In a few cases this debt ratio might exceed 39%, however, it is highly recommended your debt ratio do not exceed 39%.

Most banks would be authorized to do government mortgage loans, the requirements of approval by the VA are the same as with any other mortgage lender that indicate they specialize in VA mortgage loans. You might have had a bad experience with a mortgage loan officer of your bank, that might was not properly schooled on VA mortgage loans.

Your mortgage loan officer would collect the information and documents from you, however, he/she would be required to submit the collected documents to the underwriter, of the bank, who would be an expert in what is required for a VA mortgage loan to be approved by the Veteran Administration. .

The Veteran Administration provide all mortgage lenders who are authorized to do VA mortgage loans, to include your local banks, the guidelines necessary to get your VA mortgage loan approved. Each mortgage lender would collect the same documents and the same information.

You may select any mortgage lender authorized to do VA mortgage loans you feel comfortable with doing business with and getting your A mortgage loan approved.

From one combat veteran to another veteran thanks for serving.

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

“FIGHT ON”

Lisa asks…

What is the highest mortgage I could afford on a small home?

I generate with my fiance about $500 a week (well, its more but I am rounding it down quite a bit). We are looking to get a small home, 3 bedroom one floor house. We are in Michigan and plan to stay in our current area. I have fairly decent credit, not excellent, but certainly not bad. With utiliy cost in Michigan (winters mainly) what do you think our mortgage should be like? Whats the highest we can go on a loan? We are first time home buyers, and will likely try to find a foreclosure home to get us started for a good price.

Any opinions and help would be appreciate, its our first steps out into ownership!

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”

Carol asks…

Will I be declined for mortgage if credit card balance shows up during the loan process?

I am in the process of purchasing my first home. Lender pulled initial credit report that did not show a current credit card debt. I am worried that it will pop up as they’re monitoring my credit during the loan process till close and I will be denied. If it does show up, my debt to income ratio may be too high. This is not a new line of credit, but simply a credit card with a balance I cannot pay off quite yet. What can I expect?

John answers:

Depends on how much balance. Not a good idea to make a large purchase on a credit card while in the mortgage application process.

If this is just normal purchases and you are carrying a small balance, it might not make any difference.

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