How To Pay For Your Home

OR Register for our Deluxe MLS Search & Daily Update Service ONLINE INFORMATION WARNING: The Internet is a fabulous tool for gathering information. But what the Internet can NEVER do is interpret it. Please use online property search tools with care: relying on property data alone, without the context that a professional can provide, will usually lead to incorrect and expensive mistakes. And, making decisions regarding the purchase or sale of your largest asset with online information alone can often lead to disastrous results.

Please Be Advised That Failure to Look over the Following Can Cost You Big Bucks! The Internet is GREAT for Gathering Data on Rates & Programs, BUT When You Apply For A Loan, Make Sure You Go... LOCAL & RECOMMENDED. We Can't Stress This Enough!!! While the internet is a great place to start gathering information about rates and programs, when it comes to who you actually finance (or refinance) your home with, our experience has shown that you'll have your best experience (and not get financially hung out to dry) by going with a local lender who has been recommended. WHY? First of all, many of the rates and packages advertised online, on the radio, or in the newspaper are ´´teasers´´. The mortgage field is very competitive and there are many unscrupulous operators that offer "pie-in-the-sky" to get you hooked, only to tell you at commitment time (when it’s too late to change lenders) that they’re "so sorry" but they can’t give you that great rate any longer. Further, lenders that you pick out from an ad or online have little interest in doing well for you since their business does not depend on word of mouth. Advertising, not your satisfaction, is what drives their business. Our recommended local lenders DO have a vested interest in doing a good job for you since their future business is greatly helped or hurt by your experiences. In other words, they're ACCOUNTABLE! We work closely with them so they have a vested interest in making our Clients VERY HAPPY and our Clients give them RAVE REVIEWS. So, give us a call and we'll put you in touch. What is the Difference Between Pre-Qualification and Pre-Approval? EVERYTHING! Pre-Qualification - The lender asks you basic questions to estimate what you can afford. A pre-qualification is only as good as the answers you give and since no credit check is done, a "pre-qual" is no guarantee! However, it’s certainly better than guesswork. Pre-Approval - For a pre-approval you actually provide the paperwork to verify income, assets and debts. Your credit is checked. You are actually applying for the loan and once you obtain a pre-approval, you are almost the equivalent of a cash buyer. Need we say that puts you in a powerful negotiating position when you make an offer? For this reason, we require our Buyer-Clients to have a pre-Approval before we go house shopping. We'd recommend you get your pre-approval started as soon as possible. Even if you can't afford what you want now, one of our recommended lenders can help you to set up a game plan to get you there.

Planning Ahead Can Make Home Ownership a Reality Tips For Home Buyers Today’s low rates and variety of affordable loan products have made this an ideal home buyer’s market, and most consumers are aware that owning a home can be a source of significant tax benefits as well as pride and financial stability. But the prospect of buying and financing a home may seem overwhelming to consumers who do not know how to begin. In fact, there are several steps the a buyer can take to ensure that the experience is relatively painless and rewarding.

1. Examine your credit record. Although some lenders are willing to overlook a credit problem or two in a buyer’s total credit history, prospective borrowers should be sure they have a relatively clean credit record with no bills past due more than 30 days in the past year.

2. Set an aggressive budget and reduce personal debt. Most lenders prefer that long-term debt (debt that will take longer than 10 months to pay off) does not exceed 36 to 38 percent of gross monthly income. Setting a strict budget, and adhering to it can help prospective buyers pay off credit card balances faster, reduce debt to an acceptable level and save what is needed for a down payment.

3. Explore the wide range of affordable down payment options. While the minimum down payment required for a conventional loan is generally five percent of a home’s selling price, there are more affordable alternatives. A federal Housing Administration (FHA) loan requires less than five percent down in most cases, and lending programs designed for low and moderate income buyers, offer mortgage loans with as little as three percent down.

4. Get pre-approved and lock in a rate before seriously shopping for a home. Pre-approval by a lender, which includes verification of income and credit information, lets buyers know right from the start how big a mortgage they can qualify for. It also gives them added bargaining power with a seller.

This article was provided by Betsy Robinson of Greenpark Mortgage. She can be contacted at (508) 954-6660 or Email Betsy for additional information or to answer questions.

The Mortgage Process

Mortgage Terms (Now you can really show off!) Adjustable rate mortgage (ARM) - A mortgage for which the interest rate and the payments change during the life of the loan. Amortization - A plan for gradually repaying, in periodic payments, money borrowed.

Commercial Bank - A financial institution authorized to provide a variety of financial Services, including business and consumer loans, checking services, credit cards and savings accounts.

Conventional Loan - A loan not guaranteed by the VA or insured by the FHA.

Debt-To-Income Ratio - A percentage arrived at by dividing the borrower’s fixed monthly obligations by the borrower’s monthly income.

Index - A reference used to measure fluctuations in particular factors of economic activity. For an ARM loan, an index of interest rates is used to calculate periodic adjustments in the rate and payment on the loan.

Installment Debts - A buyer’s long-term debts; they usually extend for periods of longer than 9 months.

Intermediate Term Loans - A home loan of less than 30 years.

Life-of-the-Loan Cap - A consumer protection on some adjustable loans. It limits the total upward adjustment that may occur during the life of the loan. Also known as the overall cap.

Lock-In Rate - A rate commitment made by lenders when making a mortgage loan to commit. Lock-In periods vary depending on your lender.

Rate Cap - Interest rate cap on an ARM loan; it restricts the upward movement of the loan’s interest rate at the time of adjustment.

Discount Points & Origination Fees - Fees charged by the lender. Points are measured as a percent of the loan with each point equal to 1% of the loan. Origination fees vary.

Documents Needed To Obtain a Mortgage Many new home buyers are unaware of the documentation required to obtain a home mortgage. Due to the secondary mortgage market, the information required to obtain a mortgage has been standardized. Although there are some differences between guidelines, the following is a suggestion of what a buyer should bring to a mortgage application: A copy of the fully executed Offer to Purchase. The name and telephone number of the person to contact for access to the property for appraisal purposes (usually the listing agent). Address of residence for last two years.

• Names and addresses of employers for the past two years.

• A copy of most recent pay stub.

• If self-employed, commissioned, or earning substantial dividend or interest income, in clude the past two years of federal tax returns signed on the second page. Include all schedules (Partnership, Corporate, of K-1’s if applicable). Also include a year to date profit and loss statement signed and dated.

• Three most recent bank statements and/or names, addresses, account numbers, and balances for all accounts with financial institutions (checking, savings, money market, stocks, bonds, savings, etc.).

• Names, addresses, account numbers, balances and monthly payments for loans, credit cards and mortgages.

• For other real estate owned, include lease, tenant at will agreements, tax bills and condo fee checks.

• Written explanations for all 30, 60, and 90 day late payments if applicable.

• Copy of deed - for refinances. The lender may require additional information depending on the particular situation. The more information that is submitted at the time of application, the quicker the loan will be approved.

Closing Costs (Now, now, isn’t it better to know what you’ll need upfront?) BASE FEES: $1500 covers appraisal, credit, attorney, recording, etc. POINTS: Each point = 1% of the loan amount. ESCROWS: $1000 estimate - Covers establishing tax escrow, prepaying first year’s insurance policy and a few days of per diem inter est. If closing early or mid-month this will be higher. PMI: First year’s premium must be paid in full at closing. 5% downpayment is 1% of the loan amount, 10% downpayment is .55%.

EXAMPLE:

$100,000 LOAN, 5% DOWNPAYMENT, 1 POINT LOAN PROGRAM

BASE FEES: $1500

POINTS: $1000 ESCROWS: $1000 PMI: $1000

TOTAL: $4500 + RESERVES

CONSUMER DEMAND FUELS REAL ESTATE CONSULTING Ripping The Roof Off Real Estate How a Multi-Billion Dollar Industry Came To Have an Identity Crisis By: Mollie W. Wasserman No matter how it's presented or deressed up, there is an inherent conflict of interest when a real estate agent is expected to act as a fiduciary agent providing objective, unbiased counsel MORE... Available in all major book stores. Or order online at Amazon or Barnes & Noble.

IT'S TIME FOR YOU TO TAKE CONTROL! How to Make Your Realtor® Get You the Best Deal By: Mollie Wasserman & Ken Deshaies A guide through the real estate purchasing process, from choosing a Realtor® to negotiating the best deal for you! MORE... Available in all major book stores. Order online at Amazon or Barnes & Noble. OR receive a complimentary copy when you schedule a Buyer Consultation with a member of our team.

Dina Raneri 508-371-4385 Email Dina

Mollie Wasserman 508-613-9101 Email Mollie

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