Improve Your Chances
With inventory diminishing daily and multiple offers being common, it is of great importance that you position yourself to have the "Best Chance" to get your offer accepted. You enhance your chance of getting the home of your choice by doing the following:
Get pre-approved for the purchase:
Submit a strong competitive offer:
Include substantial earnest money deposit:
Minimize or eliminate contingencies:
Make a buyer profile available:
Be prepared to preview a new property
Buyer and agent to have instant communication
Mortgage Application Checklist
Copy of your Purchase & Sale Agreement.
Your present mortgage information.
Two year history of employment and verification of all income sources.
If self-employed, copies of past two years Federal Income Tax Returns.
Information about your checking, savings and credit card accounts.
Name, account number and outstanding balance of each of your debts.
Information about any assets.
Information regarding any other assets that will be used as funds to close.
If FHA - Copy of Social Security card and photo ID.
If VA - Certificate of Eligibility or DD214.
If Employee Relocation Client - include relocation information and copy of offer, promissory note and copy of check on bridge loan.
Questions For Your Lender
Are both fixed-rate and adjustable mortgage loans available?
What is the interest rate?
How long can I "lock-in" the financing at the current interest rate?
Is a float down lock available in case rates drop after I have locked in?
What are the other fees a lender may charge me in conjunction with my loan?
Are funds for a second mortgage available?
On adjustable loans:
Is there a pre-payment penalty clause?
What is the "grace" period?
If you sell your house, will the new buyer (if he/she qualifies) be able to assume your mortgage at the same interest rate?
Do you have to pay "points" to get your new mortgage?
Will the lender require mortgage insurance?
Is the loan serviced locally or is the servicing sold?
Ask for a written "good faith estimate".
Fixed Rate Mortgage
The interest rate stays the same throughout the term of the loan - usually 15 or 30 years - so the principal interest portion of your payment remains the same. Payments are stable but initial rates tend to be higher than adjustable rate loans and often cannot be assumed by a subsequent buyer.
This is a loan which must be paid off after a certain period. The advantage they offer is an interest rate that is lower than a mortgage that is made for 30 years.
Adjustable-Rate Mortgage ARM)
The interest rate is linked to a financial index, such as a Treasury security or a cost of funds - so your monthly payments can vary up or down over the life of the loan - usually 25 to 30 years. Interest rates can change monthly, annually, or every 3 or 5 years. Some ARMs have a cap on the interest rate increase, to protect the borrower. Other terms relating to adjustable-rate mortgages:
Adjustment period: The length of time between interest rate
changes. Example: one year ARM-interest changes annually.
The VA does not lend money, it guarantees a portion of the loan so that lenders who originate the loan feel comfortable with their risk. Qualified veterans can obtain loans up to $424,100 with no down payment in most parts of the country. VA-guaranteed loans can be combined with second mortgages and are assumable upon qualifying by any future buyer. Your lender will provide the latest limits and requirements.
FHA does not lend money or make a loan; rather, it insures loans. The down payment can be as low as 3.5%. Discount points may be paid by either buyer or seller. FHA charges a 1.75% up front Mortgage Insurance Premium (or as little as 2% for a first time home buyer) that can be financed in the mortgage amount or paid in cash (no premium is required for condominiums). The borrower must also pay an annual Mortgage Insurance Premium or .5% which is collected monthly. These amounts should be confirmed with your lender as they periodically change. Your lender will provide the latest limits and requirements.
Seller Assisted Second Mortgage
Buyer "takes over" or assumes the mortgage obligation of the seller (with concurrence of the lender). The interest rate doesn't change and is sometimes lower than current rates. Often the loan fees are less as well.
Home Buying Glossary
Bill of Sale
Certificate of Reasonable Value
Certificate of Title
Closing Statement (Settlement)
Deed of Trust
Federal National Mortgage Association (FNMA)
Graduated Payment Mortgage
Home Inspection Report
Home Warranty Plan
Mortgage Life Insurance
Planned Unit Development (PUD)
Private Mortgage Insurance (PMI)
Prorate To allocate between seller and buyer their proportionate share of an obligation paid or due. For example a prorate on real property taxes, fire insurance, or condominium fee.
Tenancy in Common A type of joint ownership of property by two or more persons with no right of survivorship.
Title Search or Examination