Q & A cont'd
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How do I choose the right Lender for me?
Asking a friend or family member to recommend a good lender usually works well, however,
your Realtor can also recommend a few lenders to choose from. Choosing a local lender who
knows the area in which you are searching is beneficial, since the lender will be familiar with
home values and conditions of the area.
How are pre-qualifying and pre-approval different?
A pre-qualification letter is an informal way to see how much home you can afford using your
debt-to-income ratio. A pre-approval letter is a lender's actual commitment to lend to you. It
involves the actual approval process and gives you a definite idea of what you can afford.
What steps are needed to secure a loan?
First you must complete a loan application. You will need the following:
*Pay stubs for the past 2-3 months
*W-2 forms for the past 2 years
* Information on long term debts
* Recent bank statements
* Tax returns for the past 2 years
* Proof of any other income
* Address and description of the property you are purchasing
* Signed and accepted purchase and sale agreement
What is a good faith estimate?
A good faith estimate list all fees paid before closing, all closing cost, and any escrow cost you
will encounter when purchasing property. The lender must supply a good faith estimate within
3 days of application. This way you can make an accurate judgement when loan shopping.
What makes up closing cost?
Closing cost usually consists of the following:
*Attorney's/escrow fees
*Interest (paid from date of closing to 30 days before first monthly payment)
* Loan Origination fee (lenders administration cost)
* Recording fees
* Survey fees
* First premium of mortgage insurance (if applicable)
* Title Insurance ( your and lenders)
* Loan discount points
* First payment to escrow for future real estate taxes and insurance
* Paid receipt for homeowners insurance policy (fire/flood if applicable)
* Any documentation preparation fees
Asking a friend or family member to recommend a good lender usually works well, however,
your Realtor can also recommend a few lenders to choose from. Choosing a local lender who
knows the area in which you are searching is beneficial, since the lender will be familiar with
home values and conditions of the area.
How are pre-qualifying and pre-approval different?
A pre-qualification letter is an informal way to see how much home you can afford using your
debt-to-income ratio. A pre-approval letter is a lender's actual commitment to lend to you. It
involves the actual approval process and gives you a definite idea of what you can afford.
What steps are needed to secure a loan?
First you must complete a loan application. You will need the following:
*Pay stubs for the past 2-3 months
*W-2 forms for the past 2 years
* Information on long term debts
* Recent bank statements
* Tax returns for the past 2 years
* Proof of any other income
* Address and description of the property you are purchasing
* Signed and accepted purchase and sale agreement
What is a good faith estimate?
A good faith estimate list all fees paid before closing, all closing cost, and any escrow cost you
will encounter when purchasing property. The lender must supply a good faith estimate within
3 days of application. This way you can make an accurate judgement when loan shopping.
What makes up closing cost?
Closing cost usually consists of the following:
*Attorney's/escrow fees
*Interest (paid from date of closing to 30 days before first monthly payment)
* Loan Origination fee (lenders administration cost)
* Recording fees
* Survey fees
* First premium of mortgage insurance (if applicable)
* Title Insurance ( your and lenders)
* Loan discount points
* First payment to escrow for future real estate taxes and insurance
* Paid receipt for homeowners insurance policy (fire/flood if applicable)
* Any documentation preparation fees
BORROWED FROM HUD WEBSITE
Q & A CONT'D