Mortgage Loan Overview
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- Complete a no-obligation free and secure mortgage rate quote online
- Receive mortgage loan numbers for your unique scenario
- Give us a call to discuss to discuss the mortgage loan numbers
- Select the loan program that makes the most sense for you
Get pre-qualified today quickly and securely. Choose the right purchase mortgage loan for your financial situation. Our system allows you to compare loan programs against each other to determine which program makes the most sense for you. Compare mortgage rates on fixed-rate mortgages as well as deciding whether not to pay discount points.
Mortgage Loan Q+A
This depends on which loan program you can qualify for, as well as what the property occupancy is. Assuming you’re purchasing a primary home, down payment can be as little as 3.5% or in some cases 0% financing on some government loans including USDA and VA mortgages.
Plan on 10% down for a second home and 20% down if the property is going to be a rental. The down payment is the difference between the purchase price and the loan amount, your skin in the game, so-to-speak. These monies are due at time time escrow closes less any earnest money you initially put into the transaction when you made your purchase offer. Some contracts are written up putting in earnest money followed by an increased deposit upon release of loan contingency (the point in the transaction where you fully commit to purchasing the property and would have attained loan approval at this point as well.)
Use approximate 3% of the purchase price which includes closing costs (independent of discount points) and also accounts for prepaid items such as prepaid property taxes and fire insurance if you plan on having a monthly escrow account where the lender pays the taxes and insurance on your behalf. Otherwise, plan on approximately 1.75% of the sales price and paying property taxes and insurance separately.
How to reduce cash to close when buying a house
Seller concession- let’s say you find a house for $400,000. You make an offer to purchase the house for $410,000 with $10,000 back for closing costs. This does make your offer the same as it would be if you offered $400,000 without a credit as the seller’s net proceeds are equal.
However, if you ask for a lower purchase price and ask for credit for closing costs your offer becomes weaker because the seller doesn’t receive as much money to pay off any liens or encumbrances (like loans) they may have on the home. In other words, their net is reduced, thus making your offer weaker. While credits for closing costs are difficult to obtain, it is still a viable option for reducing your cash to close.
Higher loan amount/Less Down- if you can qualify, taking a bigger loan amount will reduce your cash to close. However, higher loan amount means a few things you must be aware of as informed home buyer:
- higher loan amount means bigger loan-to-value
- bigger loan-to-value potentially means higher interest rate
- higher interest rate has the ability to make loan more pricey
Lender credit- a lender credit simply means taking a higher interest rate in exchange for getting a lender credit to absorb closing costs and subsequent cash to close. This option does mean a higher interest rate which means a larger interest expense over time unless you plan to repay your principal each month, which could counteract having to take a higher interest rate. In fact, prepaying your mortgage is something you can do anyway to save substantial interest over the term of the loan.
Agent credit- this can come from your buyer’s agent, the listing agent, or a combination of the two. While this is definitely challenging to come by, it is something that is an option if cash to close becomes tight. Agents earn their commission and work their tail off for you as a home buyer. So use this option as a last resort scenario if you absolutely need additional funds to close.
Trying to buy a home? Want to see how much you get get pre-approved for? Start today by getting a free mortgage rate quote.
What you’ll need:
- documentation from the Secretary of State showing the business is in fact closed
- an explanation of why the businesses closed and why the business losses were taken
On one hand of the spectrum if you show maximum profits you’re going to pay income taxes on those profits, but at the benefit of being able to qualify for a loan substantially more easily. The other option is showing lower profits, lower income which keeps the tax man at bay, but at the expense of risking the chances of qualifying for a home mortgage.
Are you self-employed or own your own business? Been told you can’t qualify for a mortgage? Get a second opinion by getting a complimentary mortgage rate quote for your purchase or refinance today!
On January 10, 2014, qualified mortgages took shape for the entire mortgage industry mandating lenders specifically document of borrowers ability to repay. Because of of these new regulations, if you receive a mortgage quote offering less the normal documentation such as not needing a pay stub for example if you are a W-2 wager, or only needing one year of income tax returns among others, this should raise questions.
The first question you would want to ask yourself is how is this lender able to do something that others cannot? Mortgage lenders don’t have a monopoly on the market all mortgage money comes from the same place with the exception of folio lenders which are usually local banks and credit unions who have niche products but still have ability to repay requirements which still requires full income documentation.
The following is the traditional list at the minimum an approved lender would request of you when determining whether or not to approve you for a mortgage:
- Two years of tax returns
- Two years of W-2′s
- Thirty-day pay stubs
- Sixty-day bank statements
Beginning The Loan Process
Put together the financials, apply with a lender, allow to obtain your credit report. Doing this will allow you to accomplish your main objective which is to determine whether or not the figures are affordable in alignment with your goals and expectations.
Need a mortgage? Start by receiving a fast mortgage rate quote to purchase or refinance a home, it’s free!
When refinancing , plan the same with one caveat. If you refinance with your lender i.e. the servicier of your loan collecting your monthly mortgage payment, they can from time to time originate a new loan for you without necessarily needing financials.
In order to accomplish this feat, you will need excellent credit and extremely low debt to income ratio as well as a loan to value ratio of 60% or lower.
For the majority of consumers seeking loans, following information is needed to get qualified:
- tax returns for the most recent last two years
- W-2s for the most recent last two years
- 30 days pay stubs
- bank statements for the most recent last two months
- profit and loss statement if you’re self-employed with year-to-date income
Here’s how to properly document any one of the big three credit issues:
Foreclosure- can be documented with the trustee’s sale date deed. Lender will use the latest date stamped on the trustees sale date deed. 3 year window using an FHA insured loan, seven years on a conventional loan.
Short sale- can be documented with the grant deed deeding the property from the seller to the new buyer. Lender will go by the most recent date stamped on the grant deed as well. 3 year window using an FHA insured loan, seven years on a conventional loan unless 80% loan to value or lower
Bankruptcy- full bankruptcy discharge papers including the schedule of creditors from the most recent discharge date. Lender will go by the discharge date. 4 Year window using an FHA insured loan, four years on a conventional loan.
Most mortgage professionals have a relationship with a particular title company who can who can obtain the information necessary directly from county records making the process dramatically easier.
If you would like to qualify for a mortgage to purchase or refinance a home, start by contacting Scott!