Frequently Asked Questions
Some common questions you may have. Don't hesitate to contact me any time for more help-that's what I'm here for! I take great pride in helping all my clients so you'll feel comfortable and confident getting your new mortgage and having as easy and stress free experience as possible.
A Residential Mortgage is a loan you get to help you finance the purchase or refinance of a residential property. The house or condo you buy is the collateral for that loan 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 most loans when you put less than 20% down payment on the property. There are many different options to choose from.
Ready to lock in your interest rate? You can pay points to get a lower interest rate. One point equals 1% of the mortgage amount. Paying for mortgage points doesn’t always make sense though. As your mortgage advisor, I’ll explain those options to you and together we’ll determine what is in your best interest.
A mortgage pre-qualification is an estimate of how much you can borrow. A mortgage lender who pre-qualifies a buyer asks them for information on credit, income, debts and assets without verifying the information. So it's really just a guess. You CAN'T make an offer on 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 usually 1 paystub, a W2 and bank statements to for proof of money for down payment and closing costs. I verify and will go over all the info with you to find out how much money you can qualify for and give you 100% certainty that you will be approved when your application is submitted to a lender.
You need a Pre-Approval letter 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 it's fairly quick! Some I can do in less than an hour and others may take a day or two. Every buyer’s situation is different. For hourly, salary W2’d employees; it’s a simple process. For those who are self employed, it can be more complex and take more time to verify and review tax returns, etc. The faster you can provide the documentation required, 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 home inspection is not required but most purchaser's choose to have done. It 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 $250-$400. Specialized inspections for mold or foundation issues usually involve an expert and can cost more.
Some 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 know if there are any major problems or defects that would make you cancel your contract and move on to another home.
An appraisal is usually required by the lender because the home is the collateral for the money they are lending you. It's a detailed report of fair market value derived mostly from comparable sales in the neighborhood. The appraised value must equal what the purchase price is. If an appraisal comes in lower the buyer and seller must try to renegotiate the selling price.
To determine current market value, an appraiser will compare the sale price of the home purchase with that of 4 or more comparable homes in the area and have sold within the last 3-6 months or more, then adjust for differences 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. Cost for an average appraisal is $450 and part of your closing costs.
Many times Appraisal Waivers are allowed depending on the details of the borrower's approval and aspects of the home. I go over all those details with you when we start the process.