Preparing Financially for the Mortgage Process

Purchasing a home is exciting and adventurous. Home buyers, particularly first-time home buyers, typically don’t know a lot about the process of financing a home. To avoid making mistakes, you need to know what you should expect. It is important to consider the state of your credit, the additional costs besides just the down payment, and the important questions dealing with the future.

 

The Credit Aspect

Your credit score is one of the first things a lender will look at when you apply for a mortgage. To cut through all that confusion, here are five tips you can act on right now:

  • Check your credit reports for free once a year through the three credit bureaus: Equifax, Experian, and TransUnion. Why all three? Because the information in each of the three bureaus’ reports can differ. If one or all of the reports include mistakes, your credit score may be negatively affected, and you may need to address the errors before going house shopping.
  • Be strategic with credit card use. The percentage of your credit limit that you use every month can affect your score. Make sure your balance doesn’t come too close to your limit.
  • The simplest and most important tip? Pay off your balance each month. To maintain a healthy score, pay off the balance before the due date. Anything after 30 days past the due date can spell very bad news for your score.
  • Be consistent. Good credit behavior over the long term will keep your score high.
  • Don’t take on more credit. If you apply for several different credit cards, you’re sending a message that you may have maxed out your other accounts

 

Save enough for the down payment and other additional fees

You should plan to make a down payment of 3.5% – 5% at the very least when you are determining affordability. It is important to consider that down payments are not the only costs associated with the purchase of a home. Your lender should be able to provide you with a breakdown of your costs that you will be paying upfront and on a monthly basis. Here are some basic tips to help you save for the costs associated with buying a home:

  • Start a budget: Making a budget allows you to see your expenses, how much money is coming in, and what is left over to save or pay off debts. When you have a savings goal it, helps prioritize your money by eliminating or cutting down on unnecessary expenses.
  • Automate: Once you have created a budget and figured out how much you can comfortably save each month or paycheck, set up a specific amount or percentage of your paycheck to go to savings automatically. For some, it helps to open up an entirely separate savings account for their home’s down payment and expenses. This method allows you to see how much you are saving specifically for the home buying process and keeps you from accidentally spending this money on something other than your new home.
  • Increase your income: If you are worried about cutting back expenses, or just want to save for your down payment faster, consider finding ways to increase your income. Some ideas include working overtime, getting a second job, or finding alternative ways to making money such as selling items online.
  • Save any unexpected money: When you get a large sum of money, such as a bonus or your tax refund, itis all too easy to take on the extra cash and purchase that one expensive thing you’ve had your eye on for months. Instead of going on a shopping spree, take that money and put it into your savings right away to help you achieve your dream of homeownership sooner.

 

Affordability now and in the future

Regardless of the level of income you have today, you need to figure out what the future may hold before you sign on the dotted line. For example, if you’re planning to have kids sometime down the road, how will these happy additions impact your family income? What effect will job changes have on your current income level? And have you planned for monthly payments into your rainy day savings account?

Everyone who looks to buy a home will have a payment amount that is affordable today, but in the face of your answers to the questions above, will that number still work for you down the road? These are some questions to consider as you think about homeownership.

 

Feel free to talk with a loan officer in your area to determine if homeownership is the right path for you!

How Does the Mortgage Loan Process Work?

Mortgage Loan Process

How does the mortgage process work? From the minute we receive your application until your closing date (that’s when you get your keys!), we are here to help you. Here is a little more information on what to expect during your mortgage loan process.

BEGINNING THE MORTGAGE PROCESS

The first step in the mortgage process is to submit an application and authorize a credit check. You can submit an application securely online or in many cases, our loan officers will take an application over the phone. Find a loan officer near you using our branch locator or submit an application now and we will connect you with a licensed mortgage professional in your area.

Verifying documents is absolutely essential to the mortgage loan process. It is generally best to submit these materials at about the same time you submit your application to ensure a quick and smooth mortgage loan process. Required documents include 2 years W2’s, 2 paystubs, 2 bank statements. Your loan officer will explain what documentation is needed after you submit your application, but here is a more detailed list of required documents for your convenience.

After you have submitted your application and the required documentation, you may be pre-approved for a mortgage loan. Read more about the importance of pre-approvals.

PROCESSING YOUR MORTGAGE LOAN

The mortgage loan process will move forward once you select a property to purchase, submit an offer to purchase letter and received a signed purchase agreement from the seller. Your Realtor will assist you with this stage, but it should move smoothly since you have already been pre-approved!

Once the purchase agreement is received and we have received your written consent to proceed with the mortgage application, we will order an appraisal to determine the property’s market value for financing. Appraisals are performed by qualified independent real estate appraisers, typically after your purchase offer is accepted by the seller. Read more about appraisals here.

In addition to the appraisal, we will select a closing company to research the property title. An abstract will be completed to determine the legal owner of the home and whether there are unpaid taxes, liens, etc.  Meanwhile, our team of experienced processors will be verifying all the documentation you submitted regarding debt, income and assets.

THE LOAN COMMITMENT LETTER – FINAL MORTGAGE APPROVAL

Our experienced underwriting team has the privilege of making the final decision regarding your loan approval. Underwriters evaluate all the information and make sure it aligns with your specific loan program guidelines. If all the required documentation has been received and no conditions are outstanding, a loan commitment or final approval is issued.

Our closing department will be notified of the underwriters’ final approval and begin assembling your loan closing documents, including the  HUD 1 Settlement Statement. The HUD 1 Settlement Statement details all final numbers, showing the breakdown of costs and money needed at closing. Our experienced closing department will require your proof of homeowners insurance before a closing appointment can be scheduled. You must have one year of homeowners insurance paid prior to closing. Your loan officer can explain the specific requirements for the homeowners insurance binder.

CLOSING YOUR MORTGAGE LOAN

After proof of homeowners insurance is confirmed, a closing meeting is scheduled! You are very close to your dream of homeownership!

You are required to attend the closing meeting along with a representative from the title company. Your Realtor and loan officer are typically present too.  During this meeting all final signatures are acquired and final payments (certified check required) are distributed. And the best part…your will receive the keys to your new home!

OUR MISSION STATEMENT

Our mission is to be the home financing partner that you trust to serve your family, friends and community. Through our family of dedicated mortgage professionals, our commitment is to deliver an exceptional experience. Our unwavering dedication to integrity, honesty and ethics is the foundation of all of our relationships.

ABOUT INLANTA MORTGAGE

Last year, Inlanta Mortgage celebrated its 20th Anniversary. Inlanta Mortgage is a growing mortgage banking firm committed to quality mortgage lending, ethical operations and strong customer service.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Freddie Mac and Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin NMLS #1016. Inlanta Mortgage was recently named a Top Mortgage Lender in 2013 as well as 2012 by Scotsman Guide. Inlanta was also recently named a Top Workplace in 2014 as well as in 2012. Inlanta has also been named one of the “Top 100 Mortgage Companies in America” in 2011, 2012 and 2013 and one of the 50 Best Companies to Work For by Mortgage Executive Magazine.

Existing Home Sales Up 6.5%

Existing-Home-Sales

Existing home sales rose 6.5% in July, reaching their highest level in nearly four years, the National Association of Realtors stated in a news release today.

Existing Home Sales

Existing home sales have remained above year-ago levels for 25 months. In July existing home sales rose 6.5 percent to a seasonally adjusted annual rate of 5.39 million in July, 17.2 percent above the 4.60 Million-unit pace in July 2012. Existing home sales are completed transactions that include single family homes, townhomes, and condos.

Tight Housing Inventory Leads to Price Growth

At the end of July, total housing inventory rose 5.6 percent to 2.28 million existing homes available for sale. Listed inventory is 5.0 percent below a year ago. “Tight inventory in many areas means above-normal price growth for the foreseeable future,” said Lawrence Yun, chief economist at the National Association of Realtors.

Median Home Prices Rise

In July, the median existing home price for all housing types was $213,500 – a 13.7 percent jump from July 2012. This is the 17th consecutive month of year-over-year price increases.

Begin the Mortgage Process

Does recent housing and finance news have you wondering if now is the time to buy a home? To begin the mortgage process, contact a licensed mortgage loan originator near you using our branch locator. Prospective home buyers don’t need to have a purchase property in mind to begin the process. Our loan professionals can help you determine what loan program will be best suited to your financial situation and provide a pre-approval to aid in your house hunting adventures. If its more convenient for you, you can simply apply online now, and we will connect you with a loan officer in your area.

About Inlanta Mortgage – Celebrating 20 Years

Celebrating its 20th Anniversary, Inlanta Mortgage is a growing mortgage banking firm committed to quality mortgage lending, ethical operations and strong customer service.

Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs here.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS #1016. Inlanta Mortgage is proud to be named to the Scotsman Guide Top Mortgage Lenders 2012 list and to be among the Top 100 Mortgage Banking Companies in America in 2012 and Fastest Growing Milwaukee-Area Firms.

 

 

DOs & DON’Ts of Mortgage Process

Do's and Don'ts of Mortgage Process

Ensure a Smooth Mortgage Process

Have you applied for a mortgage loan? What do you need to know to ensure a smooth mortgage process? Here are some important DO’s and DON’Ts you should be aware of if you have applied or if you are considering applying for a mortgage loan.

Don’t Apply for New Credit

If you have applied for a mortgage loan or intend to apply for a mortgage, do not under any circumstances apply for new credit. This means no new credit cards, credit card consolidations or auto financing. If you open a new account during the mortgage process, it will need to be verified by your lender. While you may think that your lender won’t know, lenders do a credit check prior to closing to ensure your account status hasn’t changed. Anything that changes will require additional verification. Your credit score could change because of your new financial situation, which could cause delays in your settlement or changes to your interest rate.

Do Inform Your Lender if Anything Changes

Inform your lender if anything changes in terms of income, address, assets, etc. If you can avoid it, try not to change jobs after a pre-approval. If you change jobs, your lender will need to verify your new employment. In most cases, you will need two paystubs to prove your new employment which could delay your closing date. In addition, a lender prefers to see a two-year work history.

Don’t Co-Sign for Another Borrower

This is the same as applying for new credit. IF you co-sign for another borrower, this will show up on your credit report and could affect your credit.

Do Pay Your Bills on Time

Pay all your bills on time and keep all your receipts. Do not allow any account to be overdrafted. Late payments or overdrafts may impact your mortgage loan approval.

Don’t Pay Off All Your Debt

Paying off debt is a great thing – just wait until your loan closes. Your loan approval is based upon a financial snapshot at one point in time. If you pay off your debt during the mortgage loan process, your financial snapshot changes requiring additional verification. In addition, paying down debt can reduce your assets available for a down payment or cash reserves – which could impact the debt-to-income ratio calculated during your intitial approval.

Do Ask Questions

Stay in constant contact with you lender and make sure you understand everything that is happening. Don’t be afraid to ask any questions.

Apply for a Mortgage Loan

Are you ready to apply for a mortgage loan? Find an Inlanta Mortgage branch near you using our branch locator. If you prefer, all of our licensed mortgage loan originators can securely accept mortgage applications online. To submit an application online, find a branch office and select a loan officer. If you don’t know which branch or loan officer you would like to work with, simply apply online here.

About Inlanta Mortgage

Inlanta Mortgage is proudly celebrating twenty years in business. Check out our 20th Anniversary Video.

Inlanta Mortgage provides its branches with Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Fannie Mae, FHA/VA, FHA 203K and USDA approved. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS #1016. Inlanta Mortgage was recently recognized as one of the Fastest Growing Firms in the Milwaukee-Area, is proud to be named to the Scotsman Guide Top Mortgage Lenders 2012 list and to be among the Top 100 Mortgage Banking Companies in America in 2012.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, Wisconsin. NMLS# 1016.

Mortgage Loans – The Basics

Basic Mortgage Loan Questions Answered

If you rent your home and always have… a mortgage may seem a bit scary.  Let’s try and clarify some of the basic terms and concepts related to mortgages, and give you something to think about as we approach 2012. With mortgage rates at record lows and home prices still down – this might just be the year some of you leap from renting to bona fide homeowner status.

How does a mortgage work?

A mortgage loan is secured using your new home as collateral. Over a period of time, typically 15 to 30 years, you make regular mortgage payments to reduce your overall mortgage loan debt in a process call amortization. Payments are applied to:

Principal

  • the principal is the sum of money you borrow to purchase your home
  • home buyers are often required to give their mortgage lender a cash down payment to reduce the amount of the principal (not all loan programs require down payments)
  • Click here for more information on Inlanta Mortgage’s loan programs or check back next week for our blog post detailing the loan programs Inlanta Mortgage offers.

Interest

  • interest is the amount your mortgage lender charges to use their money
  • in the early years of your mortgage, payments are mostly interest

Taxes

  • property taxes are levied by your community and based upon the value of your home (which you will still have to pay once your mortgage is paid off)
  • part of your mortgage payment is usually deposited in escrow or a trust account to pay these taxes (not required in all cases, but FHA loan programs require escrow)

Homeowner’s Insurance

  • home owner’s insurance protects the property you are buying
  • part of your mortgage payment is usually deposited in escrow or a trust account to pay your home owner’s insurance premiums  (not required in all cases, but FHA loan programs require escrow)

Private Mortgage Insurance (PMI)

  • if you put less than 20% down on your home purchase, most lenders will charge you private mortgage insurance (PMI) – which is designed to protect the lender from you defaulting on your mortgage.
  • PMI is not in anyway connected to homeowner’s insurance (PMI protects the lender, homeowner’s insurance protects your property)

Mortgage Payment = Principal + Interest + Taxes + Insurance
Check out our mortgage loan calculators to estimate how much your payments would be based upon term of loan, interest rate, loan amount, tax, and insurance or contact a licensed mortgage loan professional to discuss your unique situation.

What types of mortgages are there?

Fixed Rate Mortgages

  • fixed rate loans have the same interest rate for the life of the mortgage loan.
  • fixed rate loans are typically 15 or 30 year mortgage loans (but not always)

Adjustable Rate Mortgages (ARMs)

What does a lender need to know to qualify you for a mortgage loan?

Are there different mortgage loan programs?

There are a variety of loan program available to suit your specific needs.  Our next few blog posts will detail some of loan programs that Inlanta Mortgage is proud to offer including:

Are you ready to begin a loan application today? Apply here or Click here to find a licensed Inlanta Mortgage loan professional near you.

Inlanta Mortgage is a multi-state mortgage banker based out of Brookfield, WI. NMLS #1016