Your Questions About Mortgage Loans

Jenny asks…

How long do I have to wait to apply for mortgage loan being 1099 for 7 months. I am guaranteed 2000/month.?

I am working with a company since January as sales rep and will receive a 1099. I am guaranteed 2000/month plus commission. Can I apply for mortgage loan (along with husband) or do I have to wait before my income will also be considered.

John answers:

The question is do you have proof that you were employed prior to your current employment? If you have third party proof that you were employed and is in the same career field then you would not have a problem about being pre-approved for a mortgage loan.

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


James asks…

What is it like being a mortgage loan originator?

I was offered a job as a mortgage loan originator. I passed the required course and take the state and national test next week. However, I’ve read bad things about the job… that it has a high turnaround rate and it’s mostly sales. They offered salary plus commission and I have the leads given to me. Is this a viable career choice? I don’t want to regret accepting this job.

John answers:

Loans are a product, so you are very much in sales.

Overall, it is a professional, office job with a suit and tie atmosphere. You will likely work in a bank or that type of environment. It requires financial skills, math skills, customer service skills, and you are subject to the lending market.

Helen asks…

If you get a mortgage loan through bank and lose job. What options do you have to get out of that contract?

If you get a mortgage loan through bank and lose job. What options do you have to get out of that contract with the bank? Or what options do you have to reduce the mortgage payments so payments can still be made?

John answers:

While you can’t really “get out of” a mortgage, there are things you can do. There’s a new program for people who have lost their jobs and are getting unemployment benefits, that applies to some kinds of mortgages. The bank can reduce your payments for a few months while you are looking for another job. You may also be eligible for other “foreclosure prevention” programs, depending on what kind of loan you have.
The first thing you should do is call your bank and tell them you lost your job. The bank will send you a form to apply for whatever assistance they offer. Get your financial records in order – usually they will want to see 2 years of tax returns, proof that you are on unemployment, and at least a couple of months of bank statements. Keep a copy of everything you send to the bank, and send it by a method that will give you a return receipt.
Whatever you do, don’t just give up and walk away from your home without finding out what your rights are.

Nancy asks…

Can my parents cosign for me in a mortgage loan?

My credit score is currently 585. I want to know if it is possible that both my parents can co-sign for me on a mortgage loan? My dad is currently employed and my mom is unemployed but currently receiving unemployment benefits. Someone please help. I live in Illinois if that helps.

John answers:

Yes they can. And it not an “iffy” answer. As long as your parents make enough money to afford the entire mortgage (within the required debt ratio) you can be a part of the loan, it is just that your income will not be counted. Take your parents to your local lender and discuss your options.

David asks…

Can I include the expenses to repair the house into my mortgage loan?

We are planning on making an offer on a 100 year old house. But it needs a lot of repair work…plastering, wiring etc. How can I take the loan for that? Should I include it with the mortgage loan or should it be a separate loan?

John answers:

There are rennovation loans out there but it might make more sense to do an equity line that you can draw on only when you need to pay the contractors, etc. It depends on how much cash you have to put down, etc. Get a good mortgage person and they’ll work it out with you.

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