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Home purchase & mortgage loan

Learn what a mortgage loan is and its influence on your home purchase.
Discover the main mortgage loans we work with and their features.
Understand the main terms used when applying for a mortgage loan to purchase a house.

Preparations For Purchasing a Home

Before you start looking for a home to purchase, you will need to know how much you can spend. The best way to do that is to get prequalified for a mortgage loan.

To get prequalified for a mortgage, you just need to provide your mortgage broker with some financial information. This includes the amount of your income, savings, and any investments you have.

WHAT IS A MORTGAGE AND HOW DOES IT AFFECTS YOUR HOME PURCHASE?

A mortgage loan or mortgage is a type of loan from a bank or other financial institution that helps a borrower purchase a home. The collateral for a mortgage is the home itself. This means that if the borrower doesn't make monthly payments to the lender and defaults on the loan, the bank can sell the home and recoup its money.

HOW DOES A MORTGAGE WORK FOR YOU?

When you get a mortgage, your lender gives you a set amount of money to buy the home. You agree to pay back your loan – with interest – over several years. You will not fully own your home at the beginning but you can still enjoy and live in it. Eventually, when the mortgage is paid off, you will have full ownership of your home.

WE WORK WITH THE MOST POPULAR MORTGAGE PACKAGES

Selecting the right mortgage loan is very important. As mortgage brokers we make sure you get the best deal available for your home loan.

Conventional Loan

No PMI required with a 20% down payment.
Can be used for a wide range of property types.
Higher loan limits than some government-backed programs.
Flexible loan terms with adjustable-rate and fixed-rate options.
Learn more

VA Loan

100% financing available with full VA entitlement.
No private mortgage insurance required (PMI).
No prepayment penalty.
Guaranteed by the government.
Lenders have limitations.
Loans are assumable.
Learn more

FHA Loan

Low minimum credit score of 500.
Government-insured Loan program.
Flexible qualification for first-time homebuyers.
3.5% down payment with a credit score of 580+.
Closing costs could be paid by the seller, home builder, or lender.
Learn more

USDA Loan

0% down payment or lower down payment than other loan products.
Low private mortgage insurance (PMI).
Easier qualifying requirements for those with lower credit scores.
Can finance 100% of the home's purchase price.
Learn more

BECOME A HOMEOWNER WITH OUR MORTGAGE PROCESS

Our mortgage process is the order we follow in handling your home loans. This includes all the research, paperwork, and negotiations needed so that you can receive your house keys faster.
Application
15%
Prequalification
30%
Home Shopping
45%
Processing
60%
Appraisal
75%
Underwriting
90%
Closing
100%
Learn more about our loan process

ESSENTIAL MORTGAGE DOCUMENTS YOU WILL NEED WHEN PURCHASING A HOME

To secure the mortgage you are applying for, lenders will require some or all of these documents:
Pay stubs for the last 30 days
W-2s for the last two years
Bank statements for the last 60 days
Federal tax returns for the last two years
Proof of homeowner's insurance
1099 forms (if you're self-employed or commissioned)
Documented dividends, stock earnings and other sources of income
Proof of bonus income
Pension statements
Securities documents such as stocks, bonds, and life insurance policies
Social Security or disability income award letters, if applicable
Specific forms required by FHA, VA or USDA-approved lenders
Gift letter (if any portion of your down payment is coming from a donor gift)
A fully-signed purchase agreement
Some lenders may request written verification of your salary and position, printed with your employer's company letterhead. They may also send a Verification of Employment form for your company's human resources department to complete.

COMMON MORTGAGE TERMINOLOGY

While buying a home, you might hear some industry terms you are not used to. We have created an easy-to-understand list with the most common mortgage terms for you to get more familiar with.

Interest

The interest you pay each month is based on your interest rate and loan principal. The money you pay for interest goes directly to your mortgage provider. As your loan matures, you pay less in interest as your principal decreases.

Interest Rate

An interest rate is a percentage that shows how much you'll pay your lender each month as a fee for borrowing money. There are two types of mortgage interest rates: fixed rates and adjustable rates.

Fixed Rates

Fixed interest rates stay the same for the entire length of your mortgage. If you have a 30-year fixed-rate loan with a 4% interest rate, you'll pay the same 4% interest until you pay off or refinance your loan. Fixed-rate loans offer a predictable payment each month, which makes budgeting easier.

Adjustable Rates

Adjustable rates are interest rates that change based on the market. Most adjustable-rate mortgages begin with a fixed interest rate period, which usually lasts for 5-10 years. During this time, your interest rate remains the same. After your fixed interest rate period ends, your interest rate adjusts up or down once per year, depending on the market. This means your monthly payment can change from year to year based on your interest payment.

Taxes And Insurance

If your loan has an escrow account, your monthly mortgage payment may also include payments for property taxes and homeowner's insurance. Your lender will keep the money for those bills in your escrow account. Then, when your taxes or insurance premiums are due, your lender will pay those bills for you.

Mortgage Term

A mortgage term refers to how long you'll make payments for your mortgage. There are some few mortgage terms currently being applied by lenders, but the most common are the 15-year and 30-year loan terms. A longer-term typically means lower monthly payments. A shorter-term usually means larger monthly payments but huge interest savings.

Escrow

Part of owning a home is paying for property taxes and homeowner's insurance. To make it easier for you, lenders will set up an escrow account to pay these expenses. Your escrow account is managed by your lender and functions like a checking account. No one earns interest on the funds held there, but the account is used to collect money so your lender can send payments for your taxes and insurance on your behalf. To fund your account, escrow payments are added to your monthly mortgage payment.

Not all mortgages come with an escrow account. If your loan doesn't have one, you have to pay your property taxes and homeowner's insurance bills yourself. However, most lenders offer this option because it allows them to make sure the property tax and insurance bills get paid. If your down payment is less than 20%, an escrow account is required. If you make a down payment of 20% or more, you may opt to pay these expenses on your own or pay them as part of your monthly mortgage payment.

Keep in mind that the amount of money you need in your escrow account is dependent on how much your insurance and property taxes are each year. And since these expenses may change year to year, your escrow payment will change, too. That means your monthly mortgage payment may increase or decrease.

Principal

Your loan principal is the amount of money you have left to pay on the loan. For example, if you borrow $200,000 to buy a home and you pay off $10,000, your principal is $190,000. Part of your monthly mortgage payment will automatically go toward paying down your principal. You may also have the option to put extra money toward your loan's principal by making extra payments; this is a great way to reduce the amount you owe and pay less interest on your loan overall.

Amortization

Part of each monthly mortgage payment will go toward paying interest to your lender. The other part goes toward paying down your loan balance (also known as your loan's principal). Amortization refers to how those payments are broken up over the life of the loan. During the earlier years, a higher portion of your payment goes toward interest. As time goes on, more of your payment goes toward paying down the balance of your loan.

Down Payment

The down payment is the money you pay upfront to purchase a home. In most cases, it is required to put money down to get a mortgage. The size of the down payment you'll need to pay will vary based on the type of loan you're applying for. A larger down payment generally means better loan terms and a cheaper monthly payment. For example, conventional loans require as little as 3% down, but you'll have to pay a monthly fee (known as private mortgage insurance) to compensate for the small down payment. On the other hand, if you put 20% down, you'd likely get a better interest rate, and you wouldn't have to pay for private mortgage insurance.

Loan Servicer

The loan servicer is the company that's in charge of providing monthly mortgage statements, processing payments, managing your escrow account, and responding to your inquiries. Your servicer is sometimes the same company that you got the mortgage from, but not always. Lenders may sell the servicing rights of your loan and you may not get to choose who services your loan.

Mortgage Payment

Your mortgage payment is the amount you pay every month for your loan. Each payment has four main parts: principal, interest, taxes, and insurance.

Private Mortgage Insurance

Private mortgage insurance is a fee you pay to protect your lender in case you default on your conventional loan. In most cases, you'll need to pay PMI if your down payment is less than 20%. The cost of PMI can be added to your monthly mortgage payment, covered via a one-time upfront payment at closing or a combination of both. There's also a lender-paid PMI, in which you pay a slightly higher interest rate on the mortgage instead of paying the monthly fee.

Promissory Note

A promissory note is like an "I owe you" document that includes all of the guidelines for repayment. It is the written promise or agreement to pay back the loan using the agreed-upon terms. These terms include:

  • Interest rate type (adjustable or fixed)
  • Interest rate percentage
  • Amount of time to pay back the loan (loan term)
  • The amount borrowed to be paid back in full

Once the loan is paid in full, the promissory note is given back to the borrower. If you fail to uphold the responsibilities outlined in the promissory note (i.e. pay back the money you borrowed), the lender can take ownership of the property.

ARE YOU LOOKING FORWARD TO BUYING A HOME?

Getting frustrated because you don't know where to start?

Is it hard to keep up with so much mortgage information?

LET OUR MORTGAGE BROKERS DO THE HARD WORK FOR YOU

AND TURN YOUR DREAM HOME INTO A REALITY

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