Despite the myth, you don’t need to put down 20% of the price on a home. Interest rates and home prices are on the rise. By the time you save up the money for a 20% down payment, the home price (and down payment) will have gone up. Conventional mortgages require a down payment of only 3%. There are other loan programs that have no down payment required.

Certain loan programs, such as FHA loans, only require a 3.5% down payment. USDA loans offer no down payment options if you and the property meet their eligibility requirements. Fannie Mae and Freddie Mac also offer 3% down payment options, depending on your income and property location.  If you are either active duty or a veteran, the VA loan has no down payment or mortgage insurance. Call us to find out what loan programs you qualify for. Your down payment may be lower than you think!

Your ideal type of home loan program will depend on your income, the price and location of the property, your credit score, your financial history, and your goals for the future. Most first time buyers put down 5% or less.

Interest rates fluctuate with the mortgage backed securities market and can change multiple times in a day. We monitor the market and rates from over 40 lenders around the country everyday.  We can advise you on the best loan structure and the best time to lock in your rate.

• Income documents
  • Copies of your pay-stubs for the most recent 30-day period
  • Copies of your W-2 forms for the past two years
  • Contact information of all employers for the past two years
  • Letter explaining any gaps in employment in the past two years

• If Self-employed
  • The last two years of personal federal tax returns with all schedules
  • If you own a corporation, we will also need K-1s and corporate tax returns (S-Corp, C-Corp, etc.) for the past 2 years

• If you receive Rental Income
  • Most recent federal tax returns, including all schedules, a copy of the current lease, HOA, and mortgage statements
  • If the mortgage does not include taxes and insurance, provide the most recent tax and insurance bills as well

• Source of down payment
  • Copies of bank statements for the last two months for checking, savings, investment and retirement accounts – please include all numbered pages
  • If you are going to be receiving a gift, we will provide you with a gift letter to complete and instructions on how to transfer funds
  • If you’re selling a home, provide a copy of the ratified contract for that sale

• Identification documents
  • Driver’s license
  • Social security card
  • Green card (front and back), work authorization, or visa, if applicable

• Property documents
  • If you already have a ratified contract on the home you are purchasing, please provide a copy of it along with a copy of your earnest money deposit check
  • Contact information of all realtors, builders, insurance agents, and title company involved

Your home is both your largest asset and your largest debt. How you choose to pay it off can have a significant impact on your monthly cash flow and net worth over time. Refinancing allows you to replace your existing mortgage with a new mortgage, one that better fits your financial needs.

To find out if you should refinance, we can help you look at your short and long-term housing plans and provide you with an analysis to help determine if refinancing will be beneficial for you given your objectives.

Here are a few reasons why people choose to refinance:

• Improved cash flow
• Have additional money for another investment or home improvements
• To pay off your loan sooner
• Eliminating mortgage insurance
• Ability to switch from an adjustable rate mortgage to a different adjustable rate mortgage, a fixed rate mortgage, or cash-out mortgage

Pre-qualification is an estimate of how qualified you are to obtain a mortgage. When you are pre-qualified for a loan, your chances of acceptance are high. It’s not a guarantee that your application will be accepted, but it does indicate that you will likely meet the lender’s loan criteria. This first step in the mortgage application process will let you know what mortgage types are right for you and allow you to discuss your goals with your lender.

With a pre-approval, you complete a loan application and provide your income and asset documents, which are reviewed to confirm that you meet the loan requirements for approval. Being pre-approved gives you clarity on what you can afford and what you are comfortable purchasing. It also speeds up the process for closing and provides you with more leverage when negotiating for a property.

You should get pre-approved when you’re serious about purchasing a home. It’s necessary to complete this step before you head out to view homes, as no seller in a competitive market will accept offers from individuals who aren’t approved.

Whether you get your loan from a mortgage broker or a bank depends on your goals, your finances, and your personal preference.

A mortgage broker is an advisor who works with a variety of lenders to find the best loan for their clients. They don’t lend the money directly, so they have the ability to shop around and find you the best rates and programs to meet your needs. They also do most of the paperwork for you. Brokers can be more invested in your financial future and investigate all possibilities to help you find the best option.

A mortgage lender is an entity that supplies funds for your loan. Most mortgage lenders are big-name banks such as Wells Fargo, JPMorgan Chase, and Bank of America. If you have a long-term relationship with your lender, you might be offered favorable terms for a home loan. Banks’ guidelines for approving a mortgage loan often are more restrictive, making it more difficult to qualify.

There are different forms of insurance that lenders require depending on the type of loan you choose if you put down less than 20% of the purchase price of a home. Mortgage insurance exists to protect the lender in case you default on your mortgage and can’t make your payments.

On a conventional mortgage, you can either pay private mortgage insurance (PMI) monthly, as a one-time upfront cost, or in the form of a higher interest rate over the life of your loan. FHA’s Mortgage Insurance Premium (MIP) and USDA’s Guarantee Fee require upfront financed mortgage insurance and monthly mortgage insurance. VA loans only require a one-time financed funding fee unless you have at least a 10% VA disability which exempts you from having to pay the fee.

We can help you determine the best way to structure your loan to minimize the cost of your mortgage insurance.

There’s a lot of confusion when finding your real credit score. Mortgage lenders use a specific version of a FICO score. Most consumers don’t have access to that version of their FICO score until they apply for a mortgage.

Credit scores are readily available online through your bank, credit card company, credit bureaus, or third-party sites like Credit Karma. But each of these scores are derived from a different set of criteria, so they may not be similar to the version mortgage lenders use to approve your loan.

You should start by visiting annual credit report.com for a free report without your credit score to confirm the information on your report is accurate. You are entitled to receive one free report every 12 months from each of three credit bureaus below.

Equifax: (800) 685-1111

Experian (formerly TRW): (888) EXPERIAN (397-3742)

TransUnion: (800) 916-8800

If you want to get a version of a FICO score that may be similar to a mortgage FICO score, you can purchase it from myfico.com. These scores are usually close to a mortgage FICO score used by mortgage lenders. When you apply for pre-approval, we will provide you with your mortgage FICO score from all three credit bureaus.

Credit scoring models are complex. It can be difficult to determine exactly what changes you should make without talking to a creditor.

That said, you can follow these guidelines to improve your credit score in the future:

• Pay your bills on time.
• Keep your credit card balances to less than 30% of your credit limit.
• Pay your credit card before the end of the payment cycle.
• Don’t apply for too many new accounts.
• Don’t close existing credit cards.

As part of our service, we can provide a credit analysis and determine what accounts to pay down by a certain amount to increase your scores as much as possible in the short term. We can also introduce you to a credit law firm who can help you dispute old and inaccurate information to improve your scores.

It is advisable that you hire a home inspector to confirm that the property you are buying does not have any major issues. In addition to the home inspector who views the structural integrity and all of the major systems in the home, you may need to hire a special inspection if the property has a well, septic system or other unique features or concerns. Some additional inspections you may need can include:

• Electrical
• Heating and air conditioning
• Chimney
• Lead-based paint
• Foundation or soil
• Roof
• Well and septic
• Plumbing
• Asbestos or mold

Based on the outcome of these inspections, you can negotiate with the seller to have repairs completed prior to closing, reduce the sales price, or give you a closing cost credit so that you have money to make the repairs yourself after closing.

Prior to closing, you should have a final inspection or “walk-through” to ensure requested repairs were performed, that the home is in the same condition, and items agreed to remain with the house are there (such as drapes, or lighting fixtures).

The lender or title company will have provided you with the final numbers a few days before closing. You will need to either wire the funds needed for closing the day before or arrive with a cashier’s check payable to the title company.

At closing, a title company representative or attorney will go over the final closing disclosure numbers with you and have you sign all of the loan documents. The seller may be at the closing table with you or they may have already signed the deed to transfer the ownership of the property to you prior to the closing date.

Usually you will be accompanied by your real estate agent and title company representative. It will take about an hour to sign all of the documents. If you can’t attend the closing meeting, you may be able to arrange to have a family member sign for you via a power of attorney. You will need to set this up a few weeks prior to closing.

Once all of the documents have been signed and you have provided the amount needed at closing, you will receive the keys to your new home. Congratulations!