Choice 1 – Purpose of the Loan
Purchase – We offer a variety of loan programs and low down payment options when purchasing a home, second home, or investment property.
Refinance Rate and Term- Lower your monthly payment or decrease the length of time to repay your loan. We will help you save money if eligible.
Refinance Cash Out- You may be eligible to improve the terms of your current mortgage loan and also convert some equity into cash. Use the funds for a home remodel, college fund, paying down debt, savings, and many possibilities. With a first and a second mortgage we will check if consolidating the two mortgages into one lower mortgage payment is possible. We offer a home equity line of credit and home equity loans.
Choice 2 – Fixed or ARM
Fixed – Fixed rate loans offer the dependability of the same monthly payments for the life of the loan.
ARM – Stands for Adjustable Rate Mortgage. Typically an ARM starts off with lower initial monthly payments than a fixed rate mortgage for the first 1-7 years before adjusting based on an interest rate index. When adjusting, your rate may go up or down depending on market conditions.
Choice 3 – Life of the Loan
The most common loans taken out run for 15 or 30 years and you can choose terms that run for 10, 20 and 40 years. For simplicity sake we will compare the advantages of the most common 15 and 30-year loan.
15-year – You build equity in your house faster and have a lower rate than a 30-year loan. Your monthly payments are higher since you are paying off the loan in a quicker time period.
30-year – Lower monthly payments, over the life of the loan you pay more interest than the 15-year loan.
Choice 4 – Rates and Points
Once you know what type of loan is best suited for you it’s time to lock in the rate for that particular loan program.
Rates – The lower the interest rate you lock in will result in lower monthly payments and total interest paid for a given set of loan terms.
Points – One way to save the maximum amount of money each month is to “buy down” your rate. Discount points may be paid to the lender to obtain a reduced rate. These discount points may be refinanced into the total loan amount, along with other closing costs.
Credit Check
A credit check also is ran to verify your credit score. Your credit history will help your loan consultant process your loan application to take account of other monthly obligations you have and not exceed a payment for which will be unaffordable.
Document Request
At this time our loan professionals will request any documentation they need to complete the process. Possible documents they will ask for include rental agreements, proof of homeowners insurance, and other related documents in order to secure a loan.
Appraisal
Once the loan application is complete and you agree to the terms for which you are applying by signing the loan application, you should receive an approval within a week. Your loan consultant will then go over an appraisal order with you in order to set up a time best for you to have an appraisal scheduled.
Underwriting
Underwriting is the examination of the appraisal report, a review of all documents you have provided and an evaluation of your credit profile. It is after underwriting that your loan application may be approved for closing.
Approval
Congratulations, your home loan has been reviewed and approved! Time to move on to the final step towards closing your loan:
Lender Costs
The lender costs may include items such as discount points, processing fees and underwriting fees.
Third Party Costs
These costs include charges paid to other entities for items like title policies, recording fees, notary, and flood certifications. These are items required in order to obtain a mortgage loan. Your Loan Estimate that was provided to you earlier will list these items.
Prepaid/Escrow Costs
Each year property taxes and hazard insurance needs to be paid. You may choose to pay these items yourself or you may set up an Escrow (or Impound) Account. By doing this, your taxes and insurance are put away in an account created for you to pay these items.
You are Home Free
Once you sign you are coming down the home stretch. After all closing documents are properly executed your loan should fund, record, and your loan has closed! We are excited to help you in this process whether you are buying a home or refinancing your mortgage.
Call 1-877-212-4010 for a Free Consultation on exploring the home loan process.