to Buying a Home
Locating The Right Financing
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the option of shopping around for the best terms you can
obtain. Generally, a mortgage acceptance requires 25-40
days for conventional, 30-60 days for VA and FHA from
application to approval. In some cases, loans may be
approved more quickly. At DMS Properties, LLC ...
Residential Real Estate Services, we have no
"affiliated vendors" to provide mortgage
services. We leave that decision up to our clients,
although we do have several other lenders that we think
very highly of that we can recommend to you. You
can find them listed in our Business
Directory. Here are some things to keep in mind:
Shop Smart For Mortgage Money
It used to
be that qualified home buyers simply went to their
nearest bank or savings and loan for the standard,
fixed-rate, 30-year mortgage or the VA/FHA backed loan.
Interest rates were not highly competitive -- back then.
Now, of course, things have changed. Competition
among lenders is lively, and smart borrowers shop
carefully to find the financing that best suits their
circumstances and needs.
with several loan officers that we trust to do the job
the way we believe it should be done for our customers
and clients. There are also some that we would NOT
recommend that you work with for your financing. We can
help you get the process started. You can pick any
financial institution that you feel comfortable with,
where to shop:
Lenders - Mortgage lenders issue mortgages to
borrowers. They then process and sell the
mortgages to large investors or into the
secondary mortgage market.
Loan Brokers - Some individuals or groups
charge a fee (usually to the borrower) to match
borrowers with lenders. Sometimes they make
direct loans. An advantage of working with
mortgage brokers is that they often represent
many investors and can provide you with many more
financing alternatives, usually at the same price
as the mortgage banker.
Institutions - Mutual savings banks,
savings and loan associations, insurance
companies, and some commercial banks are the
traditional sources of mortgage loans. Savings
and Loans often grant favorable terms to their
own account holder.
Lenders - Individuals (often home
sellers) and groups (sometimes sellers
employers -- if the seller is being transferred)
lend money. This source is especially helpful in
arranging second mortgages, but can also assist
with first trusts, wrap-arounds, and other
Unions - Federal credit unions can
write 30-year conventional and government insured
mortgages. Some will make loans; others may not.
This may be a good source for credit union
Companies - To compete with the
more traditional lenders, some finance companies
promise quick service and some do not charge
mortgage points or pre-payment
Ten Questions Most Lenders Will
information most lenders will need:
amount of money you wish to borrow and the length
of time you will need the money.
current address and any other addresses covering
the previous 24 months.
social security number.
current employers name, address and phone
number and the same information for any other
employers in the previous 24 months.
gross monthly income including documentation:
most recent pay stub, final pay stub for any job
you may have left in the current year and
previous years W-2 form(s).
account statements (all pages) for any bank,
credit union, retirement, or brokerage accounts.
assets (real estate, personal property, stocks
and bonds, life insurance with cash value, etc.).
complete list of your debts including account
numbers, balances and minimum payments.
copy of the sales contract.
account, in writing, of any problems concerning
your application and any documentation of the
circumstances of those problems.
information in hand, here are the steps the lender will
take to process your application:
- Verify the facts.
- Get a credit
- Make a property
- Review your
- Decide whether or
not to make the loan.
Some Questions You Should Ask Most
to shop; a few of the questions to ask a lender:
both fixed-rate and adjustable mortgage loans
is the interest rate?
are the "points"?
long can I "lock-in" the financing at
the current interest rate?
are the other fees a lender may charge me in
conjunction with my loan?
funds for a second mortgage available?
- On adjustable
- How often
will the interest rate be adjusted?
- Is there a
maximum limit on each rate change?
- How often
will the monthly payment be adjusted?
- Is there a
ceiling on payment adjustments?
- Can the
term of the loan be extended?
- Is there a
pre-payment penalty clause? This involves extra
charges for paying off the loan before maturity.
About 80 percent of all loans in the United
States are paid off early.
- Is there an
open-end clause? This clause in a mortgage allows
you to borrow in the future for home improvements
or other purposes, up to the amount of principal
youve paid off.
- What is the
grace period? How late can a monthly
payment be made before a late charge is assessed?
What will happen if a payment is missed?
- If you sell your
house, will the new buyer be able to assume your
mortgage at the same interest rate?
- Do you have to pay
points to get your new mortgage?
Usually lenders charge points for the cost of
giving you a mortgage loan. A point
is 1% of the loan.
Slicing Interest Rates
important to keep the tax advantages in mind when
considering whether to rent or buy. A mortgage payment of
$1,500 could result in a lower overall cost than an
$1,200 rent amount after you consider tax advantages
Remember a buyer may not realize this tax
break until tax time comes around unless
withholding taxes are decreased in anticipation of
increased interest payment deductions. Please contact
your tax advisor for more information.
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Properties, LLC ... Residential Real Estate Services.
We attempt to keep it current, but some delays may occur.
To verify the most current information, contact us.