Mortgage Shopping

Phone Call for Mortgage Information:

For many potential homebuyers, the idea of shopping for a mortgage by phone seems dauntingly complicated. Actually the process is simple and routine. Feel free to call me for a list of recommended lenders.

The format for the call is outlined below:

• Ask to speak to a loan officer about obtaining a mortgage.
• Give your name and where you are from, if you are not a local resident; let the loan officer know if you are calling long distance.
• Ask the loan officer’s name and record it for future reference.
• Tell the loan officer the location (neighborhood and street address) of the home you wish to buy and the price.
• Indicate that you are calling other lenders.
• Be sure to let the loan officer know you will call back and ask for him or her specifically if you decide to make a formal loan application with the lender.

Specifically Ask For:

1. Types of loans available
2. Required down payment amounts
3. Discount points being charged
4. All additional charges (loan origination fee, underwriting fee, tax-service fee)
5. “Lock-in” period for rates and points

First Time Home Buyers:

If this is your first home or you have not owned a home in three years, identify yourself as a first time homebuyer. There are special financial products available at favorable rates for buyers in this category.

It generally takes between 5 and 6 weeks from application to approval of your mortgage loan. The processing time varies due to the appraiser’s time schedule and availability and the receipt of other documentation.

The following are the steps involved in the process:

1. You complete the loan application.
2. The appraisal and all necessary verifications are ordered.
3. Upon receipt of the completed documentation and appraisal, the loan package is reviewed for approval.
4. You receive your mortgage loan decision.

You should also be aware of CLOSING COSTS: costs typically paid for by the buyer. Closing costs are approximately 3% of loan amount, exclusive of any discount points. Discount points are 1% of loan amount.

These costs may include: Origination Fee, Recording Fee, Termite Report, Attorney’s Fee, Survey Tax, Service Fee, Title Insurance, Discount Points and PMI Insurance.

Appraisal:

This will usually cost $200 – $300 and may be required to be paid at application along with the credit report fee ($50.).

Private Mortgage Insurance:

Private Mortgage Insurance is required if you are borrowing more than 80% of the sales price or the appraised value of the home, whichever is less. PMI insures the portion of the loan above the standard 80% loan to value ratio. At closing, a portion of the total premiums can be paid and the remainder paid monthly for a specified time. Or the entire cost can be paid in a single, lump sum premium and financed in your loan.