A mortgage is a long-term loan through a bank or other financial institution, or even through the seller of the property.  The house and/or property serve as collateral for the loan.

Process for getting a mortgage:

1. Find a mortgage that's right for you.  See loan programs for information on 30 year and 15 year mortgages, and ARMs and Fixed rates.

2. Determine how much house you can afford.  Consider equity in your current home (if you own), amount you can put down, monthly payments, real estate taxes, closing costs and insurance, and PMI. 

3. Check your credit.  A mortgage lender will check your credit report immediately.  It's best to clear up any credit problems before you apply for a mortgage.  Every inquiry from a business can hurt your credit however if you personally check your credit the inquiry will not be calculated into your score.  You can check your credit report free once per year from each bureau at www.annualcreditreport.com.

4. Pre-qualification and pre-approval.  Pre-qualified means the lender is making an educated guess about how much you can borrow based on information you've provided.  This is good to do before you begin searching for a home to know a price range to look for.  Pre-approved means the lender has verified every thing you have told him or her and is offering to lend you up to a given amount at current interest rates under current conditions.  Whether pre-qualified or pre-approved, final clearance and a check at closing are subject to an appraisal satisfactory to the lender, good title, and a last minute credit check, and other verifications.

5. Gather the necessary paperwork.  W-2's from the previous 2 years, tax returns from the previous 2 years, 2 recent paycheck stubs, documents showing other sources of income such as second jobs, overtime, commissions, child support, alimony, etc.

6. Find a lender.  We will help find the lender that best fits your needs.  We have multiple lenders with hundreds of programs, so we can shop your loan for the best rate and least out of pocket expenses.

7.  Assess your potential home.  Once you've found the home you would like to buy, evaluate the home to make sure it is what you really want.  An appraisal will have to be done of the house and in inspection is optional. 

8. Prepare for closing.  We will set up a closing time that is convenient to all parties involved most importantly you!

9. Closing day.  You will have to sign legal documents and pay closing cost.

Credit

Every time you apply for a credit card or other type of loan, the lender checks your credit history.  These checks show up as inquiries on your credit report, which is maintained by the three main credit reporting agencies: Equifax, Experian, and Trans Union.  To determine your credit worthiness, many lenders rely on their own credit scoring systems or FICO scores.  The number of credit inquiries affects your FICO score.  Fair Isaac's software will ignore all auto or mortgage related inquiries that occur within a 30-day period prior to the date the credit score is tabulated.  For every 14 days prior to this 30-day period, only one inquiry will be counted.  The good news is that inquiries have relatively small impact on a credit score.  Late credit payments and high debt carry more weight.  Many mortgage brokers are willing to review your credit report with you and point out any potential problems. 

Costs

Some costs you can expect to pay associated with any new home loan are closing costs and prepaid items.  Closing costs are the actual expenses that the lender incurs in the origination of a new home loan.  These expenses include credit reports, appraisals, processing fees, and origination fees.  These fees often run between 2 - 3 percent of the amount being borrowed.  Prepaid items may be set up in escrow accounts.  Escrow accounts are nothing more than a savings account that the lender holds to pay for things such as home owner's insurance and taxes.  You will have to pay for the first year's insurance policy in full and after that they may be taken out of escrows set up with the lender.

Bankruptcy

Bankruptcy stays on your credit for 10 years.  But you don't have to wait a decade to get a loan.  You are most likely to get a loan after bankruptcy if a few years have passed since you declared bankruptcy and you have since kept an excellent credit record.  We have several different lender who will will loan to people 1 day out of bankruptcy, give us a call or apply online and we will determine which lender will best satisfy your needs.