Frequently Asked Questions

A Residential Mortgage is a loan that a mortgage broker, lender or bank offers to help you finance the purchase or refinance of a residential property. The house or condo you buy is the collateral for the lender in exchange for the money you are borrowing to finance the property. A mortgage payment usually includes four parts: principal, interest, taxes and insurance. Principal Balance is the total amount of money you borrowed to buy the home (the final mortgage amount). Interest is the price that you pay to borrow money from your lender paid over the life of the loan. Property taxes and homeowner’s insurance in most cases have to be included in the payment if you put less than 20% down payment on the property. When you have more than 20% down payment you can elect to pay those items yourself. Mortgage insurance is required on all loans when you put less than 20% down payment on the property. There are many different choices available to cover that, either included in the interest rate, paid monthly or in a lump sum.

When you are ready to get your interest rate locked in, You can pay points to get a lower interest rate. Points are a percentage of the mortgage amount. Paying for mortgage points doesn’t always make sense though. Every borrower has a different situation. As your mortgage advisor, I’ll explain those options to you and together we’ll determine what is in your best interest.

One mistake that new home buyers make is not getting a Pre Approval. Many home buyers believe that a pre-qualification is the same but it is not. A mortgage pre-qualification is an estimate of how much a buyer can borrow. It’s fairly common practice that a mortgage lender who pre-qualifies a buyer asks them for information such as credit, income, debts and assets without verifying the information. So it's really just a guess, which will do you no good if you're serious about purchasing a home. A mortgage pre-approval is what every home buyer should obtain prior to looking at homes. To obtain a valid mortgage pre-approval a buyer will be required to provide the actual documents such as credit report, paystubs, W2's bank statements and other items that may be required. Therese will go over all the info with you and then determine the amount of money you can qualify for and give you certainty that you will be approved when your application is submitted to a lender. A mortgage Pre-Approval is absolutlely necessary if you want to go looking at homes with a Realtor. They will not waste their time or the seller's time showing homes to someone who may or may not be properly qualified to purchase.

In most cases a pre-approval can be done very quickly from a few hours to a day or two. Every buyer’s situation is different. For hourly, salary W2’d employees; it’s a pretty simple process. For those who are self employed it’ can be a more complex and take a bit more time to verify and review tax returns, etc. The faster you can provide the documentation that Therese needs, the faster the pre-approval can be completed!

As explained above, getting Pre-Approved is done fairly quickly. Then it's just a matter of you finding a home and getting the offer accepted, home inspected, have it appraised and close usually within 30 days or less. Sometimes both parties, buyer and seller need a longer time frame to close perhaps 45-60 days, but those are things that are negotiated and determined in the final purchase agreement. My goal is to always get your loan approved and ready to go as soon as possible and to make sure it fits into the timeframe listed in the purchase agreement.

A standard pre-purchase inspection covers a home's major mechanical systems -- electrical, plumbing, heating and cooling - and its construction from roof to foundation, exterior and interior. Inspection of wells, septic systems, building code violations or environmental hazards such as lead or mold can require different companies and inspections if needed. The inspection contingency in your purchase contract usually allows you 5-7 days to have the inspection. Most inspections cost several hundred dollars. Specialized inspections for mold or foundation issues usually involve an expert and can cost more. Remember, repairs or remedies are negotiable; they also can derail a deal if you try to renegotiate on minor repairs. It’s best to keep in mind the home inspection is for your benefit to know about the house and if there are any major problems or defects that would make you cancel your contract and move on to another home. An appraisal is a fair market value derived from comparable sales in the neighborhood. The appraised value must equal at a minimum, what the purchase price is. If an appraisal comes in lower the buyer and seller must try to renegotiate the selling price. All appraisals must conform to guidelines set by the Federal Government, but every appraisal is ultimately a subjective analysis of a property's current market value. To determine current market value, an appraiser will compare the price of your home with that of 4 or more comparable homes in the area and have sold within the last 3-6 months or more if necessary, then adjust for differences between comparables and subject property such as lot size, square footage, updating, etc. An appraiser will physically measure and inspect the home, taking photographs to include in the report with floor plans and a site map. Appraisers are licensed by the state of Michigan under federal guidelines. All appraisers must abide by professional and ethical standards by the government. Appraisals are not required on every transaction. Ask Therese for more details on this.