How to get a home loan?

Are you nervous, scared or even apprehensive about getting your first home loan? This process can be complicated and drown out but for the most part a very easy transition. We have put together some simple instructions to ease your nerves. So breath…and breath out… great here is some of the things you are about to embark upon.

Instructions:

1.    Fill out a loan application.

2.    Get an estimate of closing costs from us. By law, we are required to provide this statement to you within three days of receiving the loan application. We also give you a clear picture of what type of loan program we have selected for you, including the rates, terms and any special information, such as prepayment penalties, special provisions, etc.. Also, a copy of your credit report is given to you during this step.

3.    We will also give you alternative choices. Then you decide which choice fit your life style best. (See my post on Home Loans to help make this decision)

4.    Negotiate fees. Sometimes you can negotiate the amount of fees or loan points.

5.    Consider lowering your interest rate by paying more points. The relationship of interest rate to points paid is an inverse one; the more points you pay, the lower the interest rate.

6.    Provide required documentation (such as tax documents, driver license, proof of income, etc.).

7.    Pay any up-front fees. Sometimes these are requires for the appraisal, credit report or processing fee be paid at the beginning.

8.    Review loan papers. Approximately one week prior to closing, loan papers will be ready for your review. Review them to see if they match the original quote we gave you.

9.    Sign your loan papers and deposit your down payment funds into your account four to six days prior to closing.

10. Bring a cashier's check for the down payment to the Title Company, Escrow Company or attorney handling the closing. The Mortgage Lender will send the title company a check for the loan amount.

11.Get ready to congratulate yourself. Once the transaction closes and you have signed off on all contingencies, and received a copy of the deed and a set of keys, and THE HOME IS YOURS.

Tips & Warnings

• If you are a first-time home buyer, you may qualify for a lower down payment or interest rate. Check with us to see what programs are available.
• Too many inquiries can make it look as if the applicant is shopping for credit - which is a red flag for some lenders. When you do select a lender, you may have to explain in writing why there are other inquiries on your credit report.
• Mortgage Lenders may impose limits on how much of your down payment can come from borrowing.
• Remember that money received from a lender will show up on your credit report, and your payments will factor into your debt-to-income ratio.

Reverse Mortgage

Counseling for a Reverse Mortgage- What is it?

By Pam Hoffine

A reverse mortgage is a unique home loan unlike any other kind. It actually allows a homeowner the opportunity to change part of their present equity into a lump sum cash payout, monthly payments or a credit line. You can be paid out the equity that has been amassed during the years you were making your home mortgage payments. Although a traditional second mortgage/equity loan would require monthly payments, this type of transaction does not. You do not have to repay the loan until you are no longer living in the home as your permanent residence.

HUD and FHA work together to create the HECM, which is Home Equity Conversion Mortgage. This reverse mortgage is federally insured, and can provide one with many benefits. Required by the HECM, is for the person to make use of a Reverse Mortgage Counselor, which is to be of a great advantage. Does a reverse mortgage require counseling beforehand? Definitely. Counseling is a precaution of reverse mortgages and is necessary for all three current reverse mortgage products. Without counseling you cannot get a reverse mortgage. Reverse Mortgage Counseling is when an independent party explains to you everything involved with a reverse mortgage. It is FREE and can actually be accomplished over the telephone or you can go to the physical place.

You can get a list of area-wide HUD Counselors from a Reverse Mortgage Lender. The counselor is going to be sure you understand the process and that it used to protect you. Reverse Mortgage Counseling is required but is actually a great advantage for the borrower. The borrower can expect the counseling to last as few as 25 minutes or up to around 2 hours if there are lots of questions from the borrower. Be sure that, once your appointment has been scheduled, you bring all of the necessary documentation the counselor has requested. This will speed up the process to obtain a reverse mortgage loan.

Martin Luthur King, Jr. Day

Change does not roll in on the wheels of inevitability, but comes through continuous struggle. And so we must straighten our backs and work for our freedom. A man can't ride you unless your back is bent.
Martin Luther King, Jr.
.......................................................................................................................................................

Martin Luther King Jr. was a man with a dream. He saw things that needed to change and got the 'wheels of inevitability' rolling. Our struggle to make change in our lives may not be as dramatic or epic as his. Freedom gives us the ability to make those changes. The only way we can't do something is because we chose too. Thanks to Martin Luther King, Jr and so many more. We all have hero's or examples of people that did the hard things to get something done. The best way we can thank them for their efforts is not to stop but keep on making the world a better place. If we say to ourselves 'that is enough...the world is as good as it can get' is to dishonor their memory. Everyday there is something we can do to make changes in our lives to make the world a better place to live. Now go out and do it.

Happy Birthday Martin Luther King Jr.!!! Keep the dream alive. 

From all of us 
Home Zone Mortgage & Loan. Eugene, OR 

Home Loan Calculator

To find the best deals out there for home loans, please feel free to use the home loan calculator on the right. Good luck in your home loan search. If you need help or advice, just call, comment or email me.
Thanks
Pam

Home Loans

Some of our job is a lot of paperwork. But the fun part is getting the right loan for the right family.  Here is a little help to getting to know the different options in home loans.

Look at the options to find right home loan for you.

To find the right home loan, it's all about saving money. Take your time finding the right house – take the same care with the getting a loan as well? When acquiring the right home loan, there are several elements to consider. What is your financial situation? How much of a down payment do you have? What are current interest rates? How long do you plan to stay in the new home? Consider these elements of your life, plus others, to help you find the right home loan for you. 

 How long will you be at this address?

First, how long you plan to stay in the home. Predicting the future is difficult, you can probably make a good guess as to how long you’ll stay. These few questions may help. Is your family going to expand or get smaller in the foreseeable future? Does your job require a transfer in the next few years or not? Are you part nomad or like to put down roots?  Then this will affect what home loan is chosen. 

You are moving in a few years

If you see a move coming within 4 to 5 years, consider several different options for the right home loan. The rates are low, you may consider a short-term fixed rate mortgage (such as a 10 or 15-year fixed loan) to build up equity for the short time in the home. Another option to consider is an adjustable rate mortgage (ARM) or a hybrid loan. An ARM gives a lower interest rate than typically offered with a fixed rate mortgage. The catch is that the ARM’s interest rate changes. A hybrid loan gives the benefit of an ARM’s lower interest rate, but the security of a fixed loan because there is a fixed period before the rate resets. If the plan is to move relatively soon, it may turn out that you sell the house before rate adjusts.

Putting down some roots

 
You’re not moving again anytime in the near future, and then a fixed rate mortgage may be the right loan for you, especially when interest rates are low. A 15-year or 30-year fixed rate mortgage can be the perfect fit. This give you the long term housing with the security of knowing what your interest rate (and monthly payments) will be. You can lock in a good interest rate that is guaranteed to you for the 15 or 30-year term of the mortgage.

What kind of down payment options are there?

Finding the right home loan also means evaluating options for the down payment. The 20 percent down payment is not necessarily the standard these days.

• No-down-payment mortgage

Yes, you read that right. It is possible to get a mortgage without putting any money down. That means that you finance 100 percent of the purchase price of the home. Sounds pretty scary, right? But, sometimes it can be a viable option. If you live in a market with unsteady pricing, it may not be that possible for you to save 10 to 20 percent of the purchase price before being priced out of the market. With a no-down-payment mortgage, you’ll get a higher interest rate and you’ll have to pay PMI (private mortgage insurance). Also, it’ll take longer to build up equity since you didn’t put any money down. Keep in mind that not having equity in your home can be dangerous if home prices fall.

• Piggy-back loan

Another way to finance a home if you don’t have enough for a 20 percent down payment is a piggy-back loan. Basically, A piggy-back loan is a combination of two loans that close at the same time to allow you to purchase a home. The most common types of piggy-back loans are an 80/20 mortgage, an 80/15/5, or an 80/10/10. An 80/20 means that you finance 80 percent of the home’s purchase price through a first mortgage, but the other 20 percent comes from a second mortgage. An 80/10/10 means that you finance 80 percent of the purchase price via a first mortgage, 10 percent from a second mortgage, and that you make a down payment of 10%. With a piggyback loan you avoid PMI, but your second loan often will have a higher interest rate. Still, this can be a good option if you don’t have enough for a 20 percent down payment.

• FHA loan

 
For the first-time homebuyer, the government runs a program to help you realize the dream of homeownership. An FHA loan lets you get in with as little as 3 percent down. This really just scratches the surface for your options in finding the right home loan. Know your financial situation and investigate all of the mortgage options so that you can get the right home loan for you.

We hope you find this helpful in your home buying search. If you have any further questions don’t hesitate to call, email, or leave a comment. 

Yours Truly,

Home Zone Mortgage & loan

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