Home Buyers Guide Congratulations! You have decided to embark on a
new and exciting adventure. You are going to discover a wealth of benefits as you prepare to find your dream home.
This guide will help you understand the financing process. This understanding can help you get an edge on finding the right home and guiding you through the process. The mortgage process has changed over the years and the more knowledge you have regarding your home financing, the more prepared you will be for making the right choices.
Your Mortgage Process Pre-Approval
Typically when you are searching for a home a listing agent will always ask for a pre-approval. A preapproval is when you actually supply the information regarding your income, assets and pull your credit. This will give you a head start in the process to finding a new home.
Documentation that we need for a pre-approval:
Application
At this point we should have all your pertinent documentation By signing the lengthy application we can move forward with the process.
• Two most recent and complete tax returns; all schedule (for self-employed borrowers)
Underwriting/Approval
• Two most recent W2’s
After the loan is initially approved, there may be some conditions that have to be satisfied including additional documentation or brief explanations.
Conditions
There may be some conditions on the loan once it is reviewed by an underwriter. This may be additional supporting documentation or some brief explanations that the underwriter may need.
• Two most recent pay stubs • Most recent and complete bank statements; all pages • A copy of your photo ID
Now you are approved and ready to close!
Home Buying Tips Don’t Change Jobs
This can create complications for loan qualification. Underwriters will have to reverify employment and gather additional paychecks to secure your financing.
Don’t Switch Banks or Move Your Money
Moving your money can cause complications in the verification process. New accounts and large deposits in the last 6 months will have to be explained and can delay the closing of your loan.
Pay Off Bills
Your mortgage consultant will advise you if it is necessary to pay off bills to help you qualify for a loan. They will also show you the best way to pay off bills and make sure you have evidence of the bills being paid in full.
Do not make any Major Purchases
Don’t buy that new car, furniture or stereo yet. A large payment can affect the amount of home you qualify for and can make it more difficult for your loan to be approved.
Calculate Finances
It is best to calculate the other expenses that will be part of your monthly responsibility. Your mortgage consultant will add these expenses to your proposed mortgage payment to make sure that you are not taking on too much debt.
Glossary Terms Adjustable Rate Mortgage (ARM)
Mortgage loans under which the interest rate is periodically adjusted as agreed to at the inception of the loan.
Conforming Loan
Non-Conforming
A mortgage amount that exceeds that which is eligible for purchase by FNMA or FHLMC. All loans above this amount are considered to be nonconforming or jumbo loans.
A loan for up to and including $417,000 in the continental United States (Alaska and Hawaii limits are higher).
Transfer tax
Private Mortgage Insurance (PMI)
Truth-In-lending
Paid by a borrower to protect the lender in case of default. PMI is typically charged to the borrower when the loan-to-value ratio is greater than 80%.
Qualifying Ratios
Two ratios used to determine whether a borrower qualifies for a mortgage. The top or front ratio calculates the borrower’s monthly housing costs as a percentage of monthly income. The back or bottom ratio includes housing costs as well as other monthly debt.
State or local tax payable when the title passes from one owner to another. A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate (APR) and other charges.
Underwriting
The process of evaluating a loan application to determine the risk involved for the lender. It involves an analysis of the borrower’s ability and willingness to repay the debt and the value of the property.
BARRY SCHWARTZ VP of Residential Lending 773.413.6242 office barry@perlmortgage.com heymortgagefans.com
Originally from Wilmette, Illinois, Barry graduated from the University of Kansas in the late 80s and started working for Perl in 1997. How does a guy with horrible math scores on his ACTs become one of the country’s most successful mortgage brokers? Barry’s drive and motivation came from his first home buying experience. “When I bought my first home I was clueless, and the loan officer I worked with never lifted a finger to help me or answer any questions. Being on the other side of that negative experience drives me to make sure my clients feel the exact opposite. I’ll sometimes tell my clients up front that I will be holding their hand from start to finish whether they like it or not.” A loan officer for more than a decade, Barry has built a reputation as being a fun, knowledgeable, and dedicated mortgage broker who makes it his number one goal to remove the financing stress from his clients. His expertise and winning personality are big reasons why Barry is consistently named one of the country’s Top 100 Loan Originators year after year.
Dean Vlamis worked as a trader at the Chicago Mercantile Exchange for 11 years, trading Eurodollar Futures. After a change in the market in July 2000, Dean moved from the trading floor to the mortgage industry. He was immediately attracted to PERL’s free and open environment.
DEAN VLAMIS VP of Residential Lending 773.413.6256 office dean@perlmortgage.com deanvlamis.com
After the refinance boom, Dean took his business to the next level. In January 2004, he created his own team within the organization – using PERL’s opportunities for expansion and growth. Dean believes in taking a common sense approach to loan origination – and creates options and flexibility to close virtually any type of loan. He has been listed as one of the Top 50 Producing Originators in the country, and continues to nurture his business based on referrals from his vast network of builders, realtors and satisfied customers. Dean keeps the mortgage process simple, easy to understand – and most importantly, stress free.
Perl Mortgage, Inc. is a licensed mortgage lender. Perl Mortgage, Inc. NMLS ID 1918 -MB0004358 - 2936 W. Belmont Ave., Chicago, IL 60618 - Arizona Perl Mortgage, Inc. 460 West Johnson Drive, Gilbert , AZ., 85233 - Mortgage Banker License # 0904956 - California L icensed by the Department of Corporations under California Residential Mortgage Lending Act - Colorado To check the license status of your mortgage loan originator, visit the Colorado Division of Real Estate Website. - Illinois Residential Mortgage Licensee Office of Banks and Real Estate, Mortgage Banking Division, 122 South Michigan Avenue, Suite 1900, Chicago, Illinois, 60603, (312) 793-3000 2936 W Belmont Ave, Chicago, IL 60618 MB0004358 -Massachusetts Mortgage Lender & Mortgage Broker License MC19186 -Virginia Licensed by Virginia State Corporation Commission, License # MC-5428 - Connecticut License # 19728 - Florida License # MLD379 - Indiana 1st Mortgage License # 10857 -Iowa License # 2011-0141 -Kansas License # MC.0025150 - Michigan 1st Mortgage License # FROO17846 - Michigan 2nd Mortgage License # SR1014 -Minnesota License # MN-MO-20541807 - Nebraska License # NE 19186 - Oklahoma License # MB002260 - Wisconsin License # 21925BA - NMLS #192928, IL:031.00096721682 (IN), LO15768 - NMLS #192928, IL:031.0009672