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Should we be pre-qualified before looking for a new home?
What information do I need to complete a loan application?
How can I find out information about my credit history?
Should we be pre-qualified before looking for a new home?
Yes! It's actually easier to buy a home if you know in advance that you will be approved. You can make arrangements with most lenders to be pre-qualified for your purchase. Here's how to do it:
- Make an appointment to see your lender. Take your financial information such as bank statements and W-2 forms, as well as paycheck stubs.
- Mortgage company will access your credit report and review your documents. At that time you will be able to discuss different financing options and decide which type of loan is best for you.
- Most lenders will provide you with a pre-qualification letter that will let your new home builder know that you have been counseled and pre-approved.
What information do I need to complete a loan application?
The first step in securing a loan is to complete a loan application. To do so, you'll need the following information:
- Pay stubs for the past 2 – 3 months
- W-2 forms for the past 2 years
- Information on long term debts
- Recent bank statements
- Tax returns for the past 2 years
- Proof of any other income
- Sales contract and legal description of property
During the application process the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. The application process typically takes between 2 and 6 weeks.
How can I find out information about my credit history?
There are three major credit reporting companies: Equifax, Experian and Trans Union. Obtaining your credit report is as easy as calling and requesting one. Once you receive the report, it's important to verify its' accuracy. Don't forget to double check the high credit limit, total loan and past due columns. It's a good idea to get copies from all three companies to assure there are no mistakes since any of the three could be providing a report to your lender. To acquire your credit report, contact the reporting companies at the numbers listed below or order credit reports online via the reporting companies' websites.
Experian (www.experian.com) or 888-397-3742
Equifax (www.equifax.com) or 800-685-1111
Trans Union (www.transunion.com) or 800-916-8800
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How do I choose the best loan program for me?
What's the difference between a fixed rate and an adjustable rate mortgage?
Are there special mortgages for first-time homebuyers?
How large of a down payment do I need?
Is there anything we should know about new construction financing?
How do I choose the best loan program for me?
Your personal situation will determine the best kind of loan for you. By asking yourself a few questions, you can help narrow your search among the many options available and discover which loans suits you best.
- Do you expect your finances to change over the next few years?
- Are you planning to live in this home for a long period of time?
- Are you comfortable with the idea of a changing mortgage payment amount?
- Do you wish to be free of mortgage debt as your children approach college age or as you prepare for retirement?
Our preferred lenders can help you use your answers to questions such as these to decide which loan best fits your needs.
What's the difference between a fixed rate and an adjustable rate mortgage?
The two most common types of mortgages are fixed rate and adjustable rate mortgages (ARMS). The interest rate with a fixed rate mortgage remains the same for the life of the loan. With ARMS, the rate varies according to movements in the financial markets.
Are there special mortgages for first-time homebuyers?
Yes. Our preferred lenders now offer several affordable mortgage options which can help first-time homebuyers overcome obstacles that made purchasing a home difficult in the past. Lenders may now be able to help borrowers who don't have a lot of money saved for the down payment and closing costs, have no or poor credit history, have quite a bit of long-term debt, or have experienced income irregularities.
How large of a down payment do I need?
There are mortgage options now available that only require a down payment of 5% or less of the purchase price. Some mortgages don't require a down payment at all. But the larger the down payment, the less you have to borrow and the more equity you'll have. Mortgages with less than a 20% down payment generally require a mortgage insurance policy to secure the loan. When considering the size of your down payment, consider that you'll also need money for closing costs and moving expenses.
Is there anything we should know about new construction financing?
Your loan will be approved well in advance and you will want to be prepared as your home progresses and you prepare to close. The following is a list of five helpful hints:
- Be sure you understand and can comply with all of the conditions of your loan approval.
- Let your lender know of any changes to be made to the house, the sales price or any contract changes.
- Do not make any changes to your financial position without consulting your lender. For instance, it may not be wise to buy a new car before closing your mortgage loan if it affects your loan approval.
- Save copies of all major paperwork that might influence your loan. For example, save copies of any bonus checks you might receive.
- Notify your lender when you are within 30 days of construction being complete. It is important to notify your lender so that any updates that are necessary can be made.
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