Becoming a homeowner is one of the biggest (and best) decisions you’ll ever make. Because there is a significant financial investment involved, the process of buying a home isn’t as simple as checking out at the grocery store. However, it also does not need to be overly complicated. Rob Yo The Mortgage Pro recognizes that you may have questions about the process of obtaining a home loan. My mission is to educate you about mortgages so that you can make the best decision and obtain the best rate. If you have questions, you can visit us in my Clayton NC or Raleigh offices, or see some answers to commonly asked questions below.
About the Loan Process
- Valid photo ID
- Most recent 60 days of FULL statements for liquid as well as non-liquid assets (ALL pages, even if left intentionally blank)
- Most recent 30 day’s of pay stubs
- Copies of most recent 2 years of tax returns (ALL schedules)
- Copies of most recent 2 years of W-2’s and/or 1099’s
Utilizing a program referred to as “Lender Paid Mortgage Insurance” allows to you put as little as 5% down and still avoid PMI. This is an excellent product to achieve an overall lower monthly payment. Ask me how to avoid PMI!
If your home loan includes mortgage insurance, part of your monthly payment will cover this. In some cases, your lender pays your mortgage insurance or you pay upfront. If you have an escrow account, then part of your monthly payments will go to property taxes and home insurance costs. Ask me how to lower monthly payments!
The amount due is determined by taking the annual amount owed for homeowners insurance, property taxes and several other bills, and dividing them by 12. This will then be added to your monthly principal and interest payment.
By spreading the costs over 12 months, it is easier for you to budget for these expenses. This way, you will not have to come up with extra cash when bills are due. Depending on what loan you obtain, an escrow account may be required.
Questions about Rates
If you obtain an interest-only loan, you will only make monthly payments of interest for a set period of time before you begin to make principal payments. During this time, you will not build any additional equity in your home unless it appreciates in value. When the interest-only period ends, your payments increase (often by a substantial amount). This is to ensure the outstanding principal balance is repaid before the loan term ends.
After discussing with your lender, if you are comfortable with the risks of an interest-only loan, they do provide flexibility for you in managing your monthly cash flow. Depending on the loan option you select, it may not be available. Even if it is available for your loan program, there are specific requirements you must meet to qualify.
Additionally, fixed-rate mortgages have the same rate throughout the life of the loan. Mortgage interest rates tend to fluctuate constantly. If you start house hunting assuming a specific interest rate, you could be surprised with a higher interest rate later on in the process.
All About Refinancing
- Save money by lowering your monthly payment
- Lower your interest rate and improve your cash flow. If you have a long term loan, this can save you significant money.
- Change your loan type from a fixed rate mortgage to an adjustable rate mortgage, or vice versa
- Refinance for a higher amount so that you can pay off other debts or acquire cash
- Change the duration of your loan. You can shorten the length of your loan, which will result in larger payments, but allow you to get rid of the debt quicker. Alternatively, you can refinance for a longer term, which will leave you with lower monthly payments, although you will likely pay more over the life of the loan.
- Consolidate your debt – especially if you have multiple loans, which you can roll into one single loan.
- Gather your financial information and documentation to submit your loan application. Use our HomespireGO® app to apply on your phone in just minutes!
- I’ll review your documents and send a pre-approval so you have a clear idea of your homebuying power while shopping around.
- Once you find your dream home, you’ll put in an offer you’re your real estate agent and negotiate with the sellers to come to an agreement.
- We’ll order an appraisal to help finalize the loan amount.
- You’ll order an inspection to check for potential issues.
- Head to the closing table – don’t forget to bring money for your closing costs – and sign!
- Congratulations & celebrate!
- Don’t open a new line of credit. Or close old ones, for that matter. Either one can negatively affect your credit.
- Don’t take out payday advances. You want to show that you’re responsible and lend-worthy, and taking out payday advances…doesn’t do that.
- Don’t pay your bills late. You’ll definitely take hits on your credit for that one.
- Don’t quit or change jobs. After you’ve closed – do it! But in the meantime, it’s best to wait.
- Don’t co-sign a loan for someone. This is a tough one. You want to help someone out by doing so, but then you are legally responsible to pay that debt if they default. Plus, it increases your debt-to-income ratio.
- Don’t change banks. Then you’ll have to show statements for each bank and sources for funds. It’s really a lot of hassle. If you really want to switch banking institutions, just wait until after closing.
- Don’t make large purchases. I’m talking a car, a boat… whatever. It will affect your credit, and it’s just not worth the extra paperwork and possible delay.
- Don’t let another lender pull your credit. Remember, credit inquiries can lower your score.
- Don’t make a big ol’ deposit into your bank account. Of course, your paycheck is fine. But when your lender sees a large sum of money deposited into your account, you’ll need to provide source information, which could slow things down.
- Don’t ignore your lender! Keep your phone nearby and check your email frequently. You’ll want to answer your lender’s questions and provide info as soon as it’s needed to keep things moving along.
- We work with some wonderful real estate agents and would love to connect you with one that will help guide you through your home search. Reach out today, and I’ll recommend a great match!
- At Homespire Mortgage, we pride ourselves on offering personalized service and expert guidance every step of the way, ensuring that you find the perfect mortgage tailored to your unique needs and financial situation.
- The credit score needed to be approved for a home loan can vary depending on the lender and type of loan. Click here to find out how much you qualify for.
- Virginia, North Carolina, and South Carolina
Whether you are first time home buyer, purchasing your dream home, refinancing an outstanding loan, or consolidating debt, I can help you take that first step toward a mortgage solution. We have a variety of products available such as Conventional Loans, FHA Loans, VA Loans, USDA Loans, Jumbo Loans, MCC and even North Carolina Down Payment Assistance. We have offices in Clayton NC and Raleigh, and also work with clients in Charlotte, Wilmington, Greensboro, and throughout the beautiful state of North Carolina.