 |
Mortgage Co.
Frequently Asked Questions
Jump to... Purchasing - Refinancing - Application Process - Glossary
Should I use a real estate broker? How do I find one?
Using a real estate broker is a very good idea. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighborhood you may be considering...the quality of schools, the number of children in the area, the safety of the neighborhood, traffic volume, and more. He or she will help you search the classified ads and multiple listing services for homes you'll want to see. With immediate access to homes as soon as they're put on the market, the broker can save you hours of wasted driving-around time. When it's time to make an offer on a home, the broker can point out ways to structure your deal to save you money. He or she will be able to guide you through the paperwork and be there to hold your hand and answer last-minute questions when you sign the final papers at closing. And you don't have to pay the broker anything! The payment comes from the home seller - not from the buyer.
How much money will I have to come up with to buy a home?
Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house.
When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies, for example, your deposit generally will range from $500 - $2,000.
The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. Others don’t require a penny. It all depends on what you and your Loan Consultant decide is best for your situation.
Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees that come from each of the parties involved in your transaction. When you apply for your loan, your Landmark Mortgage will give you an estimate of the closing costs, so you won't be caught by surprise.
How do I know if I can get a loan?
Call Landmark Mortgage today and get pre-qualified. That means you apply for a mortgage before you actually start looking for a home. Then you'll know exactly how much you can afford to spend, and it will speed the process once you do find the home of your dreams.
Should I use a mortgage broker?
A mortgage broker is a certified professional who seeks the best mortgage terms for you by accessing a network of lenders that includes major banks, wholesale lenders, credit unions and finance companies.
While most brokers have relationships with the country's biggest lenders, a broker is not beholden to any of them. A broker is beholden only to you, the client. He or she will sift through her posted rates to find you the best one.
The most basic advantage of a mortgage broker is that she saves you from approaching the various lending institutions yourself, a laborious and sometimes undignified task. You fill out an application stating your assets and earnings, and based on your financial details, he or she will scout the market for the best mortgage.
So what will my mortgage cover?
Most loans have 4 parts:
- Principal: the repayment of the amount you actually borrowed
- Interest: payment to the lender for the money you've borrowed
- Homeowners Insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders
- Property Taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year.
Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal.
What do I need to take with me when I apply for a mortgage?
Good question! If you have everything with you when you’re ready to apply, you'll save a good deal of time. You should have:
- Social security numbers for both you and your spouse, if both of you are applying for the loan
- Copies of your checking and savings account statements for the past 6 months
- Evidence of any other assets like bonds or stocks
- A recent paycheck stub detailing your earnings
- Copies of your last 2 years' income tax statements
- The name and phone number of someone who can verify your employment.
