What type of down payment is necessary?
There are various loan programs out there that each have their own unique advantages and disadvantages. Each of which have their own minimum down payment. Certain loan programs allow you to put down as little as 3% down payment. Most people believe you need a down payment of 10-20% which is not the case!
Why work with a lender or broker over a bank?
The majority of banks work with simply their own products and their own products alone. They may not have access to a variety of programs and loan options for you. While this may or may not suit your needs, it is a cookie cutter approach. A mortgage lender is an independent real-estate financing professional who specializes in the origination of residential mortgage loans. Mortgage lenders normally pass the actual funding and servicing of loans on to a servicer for the life of the loan. A mortgage lender is also an independent contractor working with (on average) as many as 40 investors and servicers at any one time. By combining professional expertise with direct access to hundreds of loan products, your lender provides the most efficient way to obtain financing tailored to your specific financial goals.
What makes for a quality pre-approval and why is it important?
When you apply for a mortgage, the importance of due diligence is paramount for a number of reasons. You should be prepared to have the following piece of documentation examined: most recent 2 years of tax returns including W2s and corporate returns, most recent 60 days worth of asset statements, most recent pay stubs and most importantly having your credit pulled. This is important for a multitude of reasons:
- Depending on how you are compensated from your employer, your income has to be calculated in a certain manner.
- Your loan programs will depend on what you have available for cash and where your down payment is coming from.
- There are portions of your tax return that underwriters examine very carefully and it’s important that your loan officer sees them early in the process to avoid any potential problems once you find the right home.
- Your credit score, as well as what is on your credit report is one of the most important pieces of your loan application, every loan program has their own FICO score requirements and it’s important for you to know what your options are from day 1. Each of these is equally important for you to know what you truly qualify for, ensuring that the underwriting process goes smoothly and you are able to close on your dream home.
Why is it important to work with a local mortgage company?
The process is very involved from pre-approval all the way up to the closing. There is a huge benefit to being able to meet your loan officer face to face, have access to them on nights and weekends, and to know they have a local presence. Most people are working from 9-5, so it is not always easy for people searching for a home to be able to communicate freely during those hours. Knowing your loan officer is local, you can meet them in person whether it be nights or weekends and be able to communicate to them freely which alleviates a significant amount of stress in the transaction as well as allows the process to go smoothly and without incident.