Category Archives: Loan Mortgage

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Norris Real Estate Brevard County

Be Smart About Financing Your Mortgage

As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home.

Get pre-approved. Sub-primes may be history, but you’ll probably still be shown homes you can’t actually afford. By getting pre-approved as a buyer, you can save yourself the grief of looking at houses you can’t afford. You can also put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.

Choose your mortgage carefully. Used to be the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—taking the points will save you money.

Do your homework before bidding. Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood with sites like Zillow. Consider especially sales of similar homes in the last three months. For instance, if homes have recently sold for 5 percent less than the asking price, your opening bid should probably be about 8 to 10 percent lower than what the seller is asking.


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Norris Real Estate Brevard County

Mortgage Do’s and Don’ts

Mortgage Do’s and Don’ts

Things You Must Do

You have made the decision to purchase a new property. You don’t have the capitol to pay cash, so you have decided to move forward with a mortgage loan. Before you go any further, here are a few tips for Mortgage Do’s and Don’ts.

Do Keep All Financial Records In Order:

Underwriting:
Understand that times have changed! Underwriting is a different game than it was 20 years ago. Underwriters are requiring more documentation than they did in the past. Just keep in mind, if it wasn’t important and they didn’t need it, they would not be asking for it!

Gifts:
If you are receiving any gift monies from relatives, they will need to document and sign a “gift letter” and an account statement evidencing the source of that gift which must be “seasoned funds”.

Current Residence:
If you are currently renting, be sure to continue paying your rent on time while saving your proof of payment. If you are already a homeowner and a selling your current home, be sure to save your HUD-1 or more recently, your Closing Disclosure. If you have decided to keep your current home, but intend on renting it out, you may need to show sufficient equity, a lease and first month’s rent along with a security deposit.

Your Financial Records:
Keep all of your financial records organized and close at hand in the event underwriting requests more information from you.

Income:
Underwriters typically verify your income and tax documents with your current employer, CPA or IRS tax transcripts. Be sure to have saved at least 6-12 months of your current jobs pay stubs.

Assets:
Save and organize any and all account statements from all of your accounts. Be sure they are numbered for each page saved. (i.e. page 7 of 7)

Your Credit:
Be sure to keep making all of your payments on time! DO NOT make any credit purchase with a new line of credit or on your current credit accounts while going through the underwriting process! The underwriters WILL pull your credit the day of or just prior to your closing. A new line of credit or significant purchase could cause underwriting to deny your mortgage at the last minute, thus causing you to lose the home.

Things You Must Not Do

Apply For New Credit:
I can not emphasize this enough. Therefore, it warrants being mentioned again! Changes in your credit can and most always causes a delay in the loan process, change the terms and interest of your financing and may even prevent you from closing and purchasing the home all together.
If there is a situation where you must open a new line of credit (or even borrow against your IRA, 401k or retirement funds) consult with your Loan Originator first

Wait to Liquidate Funds From Stock or Retirement:
If you must sell some investments, do it as soon as possible and document the transaction. Don’t take the risk that the market could move against you leaving you short of funds to close. As always, consult with your Loan Originator before making any financial transactions.

Change Job During the Process:
If, during the loan process, you believe your job could possibly change due to a promotion, probationary period, careers or even status changes ( such as salaried to commission, leave of absence, new salary or bonus structure) consult with your Loan Originator immediately.

Make Undocumented Deposits:
Typically large, but even small undocumented deposits must be sourced unless they are already identified. Make and keep copies of checks and deposit slips. Avoid depositing cash and keep all deposits as small as possible.

Ever Be Afraid To Ask Questions:
If you are unclear or uncertain about anything you need or should be doing to ensure the loan process runs smoothly, ask your Loan Originator. They are the best person equipped to guide you through the process with little or no hiccups along the way.

If you are thinking about purchasing a home and need to take a mortgage out, but do not know who to talk to. Let me or Natalie know. We work with several Mortgage Lenders that are local and would love to assist you by getting you into contact with a trusted professional Loan Originator.

 

Brevard County Realty

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Norris Real Estate Brevard County

6 Must Have Documents For A Mortgage

Category : Loan Mortgage , Sales

So, you’re in the market to purchase a home. Whether this will be your first home purchase or this is one of many you have purchased, you still have a list of requirements from your lender. Unless of course, you are purchasing with cash.

Lenders are like the cynical grandmother. They want proof for everything. If your credit score is as good as it gets and you have tons of money in the bank, you are still going to be required to provide a plethora of information to your lender.

To make the process much smoother and less stressful for you the buyer, here are a few of the “Must Have” documents you will need to get your financing processed for your new mortgage.

Getting a mortgage without documenting where your income comes from is a thing of the past. History shows that borrowers who do not or can not prove their income sources are those who are most likely to default on their mortgage.

So, if you plan on getting a mortgage for your dream home, then here are 6 documents that you must have and provide to your lender.

1. Last Two Years Tax Returns

Your lender is not going to simply take you at your word that you made a million dollars last year. They want hard, documented proof that you make what you claim you make. This is to ensure that you can afford to pay your mortgage amount every month and avoid going in default for your loan. The longer you can establish a stable and adequate salary history, the more confident your lender is to release funds on your behalf. Thus the reason for at least two years of your Federal Income Tax returns and W2 forms are required.

If your income has recently changed, your lender may require additional documentation to support and justify the change in salary.

2. Pay Check Stubs

In addition to your last two years of income tax returns and W2 forms, your lender is going to require that you provide a history of your pay check stubs to validate your current income. They want to know what your income has been for the last couple of years, but they also want to know what your current income is to show you can afford your mortgage.

3. Other Income

Not everyone works in a job that provides pay stubs. Some people are self employed or have another source of income, then you may be asked to provide documentation to support. Banks statements, letters from the source of income and 1099 forms usually suffice for that type of documentation.

4. Letter from Employers

You may be asked to provide a letter directly from your employer verifying income, hire date and position. This is a normal request form most lenders. The letter must come directly from your employer to the lender. You can not be the “middle man”. So, make sure up front that your company’s HR department is capable and willing to do this for you.

5. Proof of Funds

Once your lender has adequate information from you that not only can you afford to purchase the home and have enough income to maintain that home and the mortgage, they may require a “proof of funds” letter from your banking institution or investment firm to show that you are poised to pay closing costs and your down payment, while still having enough funds to handle a “life emergency”. If you received a “gift” from a family member for closing costs or the down payment, be prepared to ask that family member to write a letter stating that they have “gifted” you the money and do not require you to pay it back.

6. Photo ID

As silly as this may sound, if you are planning on getting a mortgage for a home, be prepared to have a government issued photo identification to provide to your lender.

I realize that not every one drives, and therefore does not own a drivers license. However, a state or government issued id card, passport or military identification will suffice.

You lender wants to verify that the person applying for the mortgage is the person they are lending funds to.

Each lender has their own set of requirements and policies regarding documentation and requirements. These documents and items we have discussed here is very typical of all lenders.

If you have any questions or concerns, contact your Buyer’s Agent to guide you through the process with your lender.  If you do not have an agent to assist you, we are always available to help!

Brevard County Realty

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