1
Get Pre-qualify for a Mortgage
When you get pre-qualified (pre-approved), lenders will estimate your finances based on the information you provide. A pre-approval will tell you exactly how much the bank is willing to lend you and specify the costs of obtaining the loan. Furthermore, getting pre-approved will demonstrate to sellers that you’re a serious buyer who is ready and able to buy their home.
2
Go for a House Hunting
The next stage in the home loan process is house hunting. It involves interviewing Realtors, finding a home, executing a contract, and completing your mortgage process.
3
Get the Mortgage Process Done
Once the seller accepts your offer, it’s time to apply for a mortgage. You typically have 45 to 60 days to fulfill your purchase contract, so you need to move fast. Within few days of submitting your application, your lender sends you a loan estimate, including your approximate interest rate, monthly payment, and closing costs. To move forward, you need to verify your income and assets. This requires extensive documentation, which is necessary for the lender to ensure you’ll be a successful homeowner who can handle loan payments over the long term. Assuming everything checks out, you should receive the “clear to close,” which means that the lender has approved your purchase.
Conventional
Loan
A conventional loan refers to a loan that is not insured by the federal government but adheres to guidelines set by Fannie Mae and Freddie Mac.
Investment
Loan
Investment loans tend to fall into one of two categories: Residential or Commercial. Since they might not need an individual income to be qualified, they are considered high-risk and therefore, more expensive.
HELOC
Loan
A home equity line of credit, also known as a HELOC, is a line of credit secured by your home that gives you a revolving credit line to use for large expenses or to consolidate higher-interest rate debt on other loans such as credit cards.
USDA
Loan
A USDA Rural Development Guaranteed Housing Loan Program is a mortgage loan offered by the US Department of Agriculture to owners of rural properties.
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* Interest rates and APR are subject to change based on many factors including but not limited to loan type, borrower credit worthiness, etc
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Prequalification vs Verified ApprovalPrequalification — A great first step if you’re just starting your search. You’ll get a better sense of your price range without needing to provide financial documentation. Verified Approval — Think of it like a step up from Prequalification. We’ll verify your financial information and credit history, then give you initial underwriting approval to show sellers your offer is serious.
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I’ve heard about getting a Pre-Qualification, but what’s the advantage if I haven’t even started looking for a house yet?"You wouldn’t go shopping for a new car without knowing how much you can afford. Why would buying a home be any different? Pre-Qualification Today = Less Stress House Shopping Tomorrow Let’s face it. One of the most stressful things about buying a home is adjusting to your new mortgage payment. Knowing your family’s financial boundaries before shopping for your new home can make the process go much more smoothly. Your pre-qualification is an essential tool when house shopping, because it… ☑️ Determines what homes are in your price range ☑️ Assures real estate brokers and sellers that you are a qualified buyer ☑️ Can be used to your advantage in future negotiations
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Can you get a mortgage without a credit score?The short answer is yes. If you apply for a mortgage without a credit score, you’ll need to go through a process called manual underwriting. Manual underwriting simply means you’ll be asked to provide additional paperwork for the underwriter to review personally. Please remember, your loan process may take a little longer and the rate may not be as competitive as the regular situation since not every lender offers manual underwriting.
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What are the benefits of owning a house? What are the advantages over renting?There are many advantages to homeownership: A sound investment – When you carefully choose a home you can afford, the payoff can be great. As a homeowner, instead of paying rent to a landlord, each month when you make your mortgage payment, you are building equity in a place of your own. The more mortgage payments you make, the more equity you’ll have. And unlike most things you buy, a home can actually appreciate in value as time passes, building more equity. ☑️ Tax advantages – The mortgage interest and real estate taxes you pay are tax deductible which can reduce your tax bill. ☑️ Real estate is marketable. ☑️ You can make your own decisions about design and décor. ☑️You can invest in upgrades that will not only bring you pleasure but can also add to the value of the property over time. ☑️ You have control over the piece of property. You are not answering to a landlord.
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What type of mortgage is best for me?There are several different types of mortgages to choose from. A conventional mortgage is tougher to qualify for credit-wise, but an FHA loan can be costlier. If you're a veteran, a VA loan could be the best option for you, and if you plan to buy a home in a rural area, a USDA mortgage could give you a no-money-down option.
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What are closing costs, and how much should I expect them to be?"The term "closing costs" refer to all of the charges you'll need to pay before your loan is completed. This can include origination fees, title insurance, prepaid escrows, and more. Closing costs can vary significantly, but generally, expect to pay around 3% of the home's price in closing costs.
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What information should I have available when I am ready to apply?For your initial pre-qualification we'll ask questions about your income, assets, credit history and employment. Once you start the application process we'll need to verify the information you gave us with specific documentation, such as your last two years of income tax returns, bank statements, pay stubs and documents pertaining to other personally owned real estate. You'll receive notification in writing of required documentation needed to obtain a final approval. In some cases, our Underwriting Department may request additional information.
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What documentation should I gather?Based on your loan type, we may ask for many different items, but in general, be prepared to show all of the following: 📄 Income verification (Last two years' tax returns, W-2s, 1099s, and your last few pay stubs) 📄 Drivers' license and Social Security card (or alternative ID) 📄 Bank statements 📄 Proof of funds to close (and an explanation of where they came from, if it's not obvious) 📄 If some or all of your down payment is coming from a gift, you will need gift letter from the source of the funds that confirm they are gift, not a loan.
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How much of a down payment do I need?The short answer is that you can get a conventional mortgage with as little as 3% down, an FHA loan with 3.5% down, and a VA or USDA loan with no money down at all. However, with a conventional or FHA loan, you'll have to pay private mortgage insurance, aka PMI, if your down payment is less than 20% of the home's sale price. (Those payments won't be a permanent fixture in your monthly payments, however. Once the loan-to-value ratio on your mortgage falls to 80%, you can ask your lender to drop them. And even without your request, lenders are required to cancel PMI when the loan-to-value ratio drops to 78%.)
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Should I get a 15-year or 30-year term loan?This depends on how much you want to stretch your budget. If you can afford the higher monthly payments, a 15-year mortgage usually comes with a better interest rate than a 30-year version. Not only will you pay off the house quicker, but you can save a tremendous amount of interest. On the other hand, a 30-year mortgage will cost less per month, allowing you to afford a bigger or nicer house, or one in a better location.
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What Is Mortgage Insurance (MI)?Mortgage insurance protects the investor if the borrower defaults on the loan. It lowers the investor’s risk when funding a home loan. In most cases, if you pay at least 20% down on your home, you're not required to carry mortgage insurance. If you are required to cary mortgage insurance, removal of the insurance may occur when the equity in your home reaches a certain percentage. Depending on the type of loan you have, your mortgage insurance may go by different names. It can be called Private Mortgage Insurance (PMI) or Mortgage Insurance Premium (MIP).
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What Is an Escrow AccountAn escrow—or impound—account is where funds are held to pay property tax and insurance bills on your behalf. If your loan is escrowed, a part of your mortgage payment goes into your escrow account every month. Then we use the money to make your property tax and insurance payments for you. You never need to worry about whether you’re saving enough or when a payment is due—we’ll manage this for you.
NMLS# 2220385
Barzin Ranjbari
Office: (972) 200 4343
Email: contact@barzinranjbari.com
Office: 5055 Addison Cir, Addison, TX 75001
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