Getting approved for your mortgage is of course one of the biggest steps in purchasing your new home. Here are some hand FAQs

Can I be pre-approved for a loan before I’ve found a property?

Yes! I not only support the idea, but strongly encourage it. By getting pre-approved now, you will know exactly what you qualify for before you begin shopping. Realtors and sellers will know you are a serious buyer because your financing is already arranged. This may be an advantage when making an offer. Your lender will take into account your current income, debt and your credit history in order to pre-approve you and determine the amount for which you qualify.

Why is an appraisal necessary? Can I use the tax value of the home?

Appraisals compare the current market value of your home to other homes in your area that have recently been sold. Tax values can sometimes be higher or lower and may not reflect the actual appraised value of the home. A current appraisal is necessary for the lender to justify the loan amount you’ve requested and is required by our secondary investors. You should not, however, rely on the appraisal for assurance about the condition of your home or as a guarantee of the value of your home.

How is the appraisal obtained?

After you have reserved your funds, I will help arrange a date and time for the property appraisal. You will be asked to provide a contact name after you have reserved your funds. The appraiser will call the contact person you list for access to the property.

Who can tell me what my property taxes will be?

The seller and/or your Realtor should provide you with the current taxes for the property. Property taxes are reassessed from time to time, so this amount may change. If you would like to confirm what your taxes would be, you can contact the county Recording Office.

What is a Good Faith Estimate?

Required by federal law, the Good Faith Estimate (GFE) is a written list of the estimated closing costs associated with your mortgage transaction, including the lender’s charges along with the local closing agent’s charges and fees. It also includes estimated amounts for real estate property taxes and homeowner’s insurance.

What is a Truth-in-Lending statement?

Required by federal Law, the Truth-in-Lending statement provides detailed information about the total charges that you will incur over the life of the loan. It includes the Annual Percentage Rate (APR), the amount of interest you’ll pay, the amount financed and schedule of payments, the total of your payments, and late payment charges.

How much down payment will I need?

Typically at least 3% is required, although the amount is increasing among some lenders. The minimum down payment required depends on the mortgage program you select.

When should I start shopping for a mortgage and how do I know what I can afford?

The best time to look for a mortgage is before you look for a house. This way you’ll know exactly the amount of money you can borrow, and have maximum negotiating power. It’s free, and will (typically) take only a short time to get your decision.

Do I need to sell my existing home before I apply for a new mortgage loan?

Absolutely not! You can apply for a new mortgage loan before you sell your current home. However, depending on your income and debt levels, you may need to sell your current home before you can close on your new home.

Why is the Annual Percentage Rate (APR) different from the interest rate?

The annual percentage rate is intended to reflect the total cost of your mortgage loan. To calculate the APR, lenders consider the interest rate on your mortgage loan, the term of the loan, and other loan fees such as closing costs, points, etc.
Can I be pre-approved for a loan if I have credit problems?

The simple answer is “Yes”, even with some credit issues in the past, pre-approval is still possible. I work with lenders who offer mortgage loan options to customers who may not have perfect credit. If you are concerned about your credit score, you can review your credit report for accuracy, and receive your credit score, by visiting Experian.