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The Mortgage Process
The mortgage process can be difficult and complex. Points, ARMs,
closing costs? What does it all mean?
I make getting a mortgage fast, simple and convenient. I guide
you through the entire process and ensure that you're completely satisfied.
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A "point" is typically referred to
as discount, intended to pay a percent of interest now, opposed to paying more
interest over the life of your loan. A "point" of anything is 1%, so 1
point on a $150,000 Mortgage is $1,500.
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An "ARM" is short for Adjustable
Rate Mortgage, typically a set rate for a pre-determined amount of time, 2 to
7 years, and the rate can go up or down after that time. The initial
rate is generally lower than a long term, 30 year mortgage.
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Closing costs are disclosed to you
on a good faith estimate. Some lenders hide their "points" in inflated
closing costs. I am very up front and encourage you to compare the costs
quoted to you on your good faith estimate and what actually is on your HUD-1
closing statement. But remember, it is called an estimate for a reason.
The four steps to mortgage approval are application, processing, underwriting, closing.
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During the application phase, I work with you to evaluate your options based on
your credit, assets, debt payments, income and loan purpose. Once we (you and
myself) determine the best program for you, the mortgage application process
is set in motion. Typically you will be required to provide the following
information:
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Purchase Agreement of home being purchased or refinanced |
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Names, Social Security numbers, addresses and phone numbers of all
borrowers |
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Last 2 Years W-2's |
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Last 2 Pay Stubs |
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Employment history for the past two years, including income |
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Last 2 Bank Statements, Checking & Savings |
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Most recent Investment Statements (401(K), Ira, Cd's, etc) |
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Current Address and Landlords contact Information |
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Divorce Decree and / or Friend of Court Statement |
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Value of owned assets (i.e., any other real estate you own) |
After our meeting, your application
and documentation will be turned over to a processor.
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During the processing phase, the
information you provided will be verified. For example, income must be
supported by pay stubs and W-2s. An appraisal will be ordered to verify the
value of the property. Title insurance will also be ordered, along with other
types of insurance, such as mortgage insurance and flood insurance, if
required.
Next, your mortgage loan application and the supporting
documentation will be sent to an underwriter, who will evaluate your ability
to repay the mortgage loan. (A mortgage loan application may go to
Underwriting, prior to receipt of the above information.)
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Closing your loan! A date will
be determined for you to sign all the documentation to secure your financing.
You will be provided with a HUD statement, which details all of the fees and
closing costs associated with your loan. You'll also receive a
Truth-in-Lending statement showing the amount of interest you will pay over
the course of the loan. Once all the documentation has been signed, the
sellers will be paid off on a purchase, or the existing mortgage will be paid
off if you are refinancing.
*** There is no set number of days for a loan to go from application to
closing. The amount of time depends on market conditions and individual loan
characteristics.***
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