How to get the keys to your new home! Catherine Purcell Senior Mortgage Loan Officer

Transcription

1 How to get the keys to your new home! Catherine Purcell Senior Mortgage Loan Officer

2 Thank you for the opportunity to serve you and make your home buying experience a positive one. I look forward to helping you get the keys to your new home! Catherine S Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com NMLS FIMC 2289

3 The Loan Application The first step in the home buying process is to get fully approved for your home mortgage. As your loan officer, I will collect data from you to verify your income, assets and liabilities and determine the amount that the banks will loan you for your new home. This information is also needed to determine the best loan program for you.

4 Initially, I will need to pull your credit report to determine if the three credit bureaus: Equifax, Experian and Trans Union are providing true and accurate information from your creditors. In the event that there are things on your credit report that need to be corrected, I will assist you to get these items updated. Mortgage credit pulls do not adversely affect your credit score, so you need not worry that having me pull your credit report will affect your scores. This initial review is needed for me to determine the various loan programs that you can qualify for. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

5 DOCUMENTATION Once credit is checked and confirmed, I will collect the following documentation. Additional documentation may be requested as verification of your income, assets and liabilities. For our beloved US Military Veterans, please provide a copy of your DD214 and Certificate of Eligibility. Thank you for your service! I appreciate all you do to keep us safe and secure here in the USA! 1. A copy of your driver s license and social security card please enlarge and lighten so that when it is transmitted over to me I can still read the figures and 2012 W2s and 2012 signed tax returns - even if you file electronically, I will need you to sign where it says "taxpayer s signature". 4. Your pay stubs covering the most recent 30 day pay period. Pay stubs must clearly show your name, your employer's name and year-to-date income figures. 5. Your bank statements covering the most recent 60 day period. Bank statements can have nothing blacked out. All large deposits that do not clearly show as cash deposits must be fully sourced and documented to evidence where the funds came from for the deposits. I need ALL pages of the bank statements: if the pages are numbered, then I need all numbered pages, even if it looks like information that I do not need send it if it is a numbered page. It will be required for final underwriting sign-off. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

6 DOCUMENATION CONTINUED 6. Some mortgage loans allow for you to use funds from a relative, employer or down-payment assistance program towards your down-payment and/or closing costs. If you receive gift funds, we will need to evidence that the donor has the funds to gift to you and you must show evidence of the funds moving from the donor's account into yours. The donor will provide a complete bank statement (clearly identifying donor as account holder, clearly showing account number and with nothing blacked out) demonstrating the funds were seasoned in their account prior to them gifting them to you. You will need to provide evidence of the transfer of the funds (the check the donor wrote to you or wire transfer evidence). And lastly, you will need to show your bank statement once the funds have arrived in your account. 7. If applicable, a signed and dated inquiry letter for inquiries showing on your credit report. Please state why the creditor pulled your credit and whether or not you opened any new lines of credit. If you do not know why they pulled your credit, please state so. 8. If applicable, a signed and dated letter explaining any derogatory items showing on your credit report. Please state the reasons that caused the delinquent payments and the safeguards you have put in place to ensure you will make timely payments to your creditors in the future. 9. If applicable, a complete set of your bankruptcy or foreclosure papers with all schedules. If you no longer have a complete set of your bankruptcy documents, the attorney that filed for you should be able to provide you with a copy. Documents can either be faxed directly to your secure file using the fax cover sheet which I will provide for you or encrypted and ed to catherinep@fairwaymc.com. Questions???? Call me! Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

7 You will need a network of professionals working together to help you achieve your dream. I will be happy to connect you with those that I have successfully worked with in the past in your area. Loan Officer: Catherine S. Purcell Fairway Independent Mortgage Corporation Catherinep@fairwaymc.com Settlement Attorney: company: cell: office: fax: HO insurance agent: company: cell: office: fax: policy number title insurance: company: cell: office: fax: Buyer's agent: Vitaly Petrov company: Lagret Real Estate cell: office: fax: vitalypetrov@outlook.com home inspector: company: cell: office: fax: pest inspector: company: cell: office: fax: home security: company: cell: office: fax:

8 Contractor: company: cell: office: fax: Plumber: company: cell: office: fax: electrician: company: cell: office: fax: structural engineer: company: cell: office: fax: mold remediation: company: cell: office: fax: architect: company: cell: office: fax: Properties that need some TLC may require licensed professionals. Obtain a copy of their license to verify that they are qualified to perform the work that you hire them for.

9 Catherine Purcell Senior Mortgage Loan Officer LOAN PROGRAMS After I review your supporting documents, we will discuss the various loan programs that you can qualify for. There are two types of financing: Conventional and Government. There are 30, 10 and 15 year fixed mortgages as well as adjustable rate mortgages (ARMs). An ARM will allow you to have a lower fixed rate for 1, 3, 5, 7 or 10 years, then after the fixed period, the rate will adjust based upon the index. The index reflects the cost to the lender of borrowing the funds on the credit market. Common indices are the rates on 1-year constant-maturity Treasury (CMT) securities, the Cost of Funds Index (COFI), and the London Interbank Offered Rate (LIBOR). Conventional financing generally requires an established good credit history and a significant downpayment of 10% or more and in some instances evidence that you will have significant reserves after you close on your new home. FHA, VA and USDA are examples of government financing. Government financing allows for little or no down-payment and is a bit more lenient on past credit flaws.

10 Thirty-Year Fixed Rate Mortgage The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan. Fifteen-Year Fixed Rate Mortgage This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate and you'll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great. Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM) These increasingly popular ARMS also called 3/1, 5/1 or 7/1 can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a "5/1 loan" has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It's a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs. Catherine Purcell Senior Mortgage Loan Officer cathienrp@fairwaymc.com

11 Adjustable Rate Mortgages (ARM) When it comes to ARMs there's a basic rule to remember...the longer you ask the lender to charge you a specific rate, the more expensive the loan. 2/1 Buy Down Mortgage The 2/1 Buy-Down Mortgage allows the borrower to qualify at below market rates so they can borrow more. The initial starting interest rate increases by 1% at the end of the first year and adjusts again by another 1% at the end of the second year. It then remains at a fixed interest rate for the remainder of the loan term. Borrowers often refinance at the end of the second year to obtain the best long-term rates. However, keeping the loan in place even for three full years or more will keep their average interest rate in line with the original market conditions. Annual ARM This loan has a rate that is recalculated once a year. Monthly ARM With this loan, the interest rate is recalculated every month. Compared to other options, the rate is usually lower on this ARM because the lender is only committing to a rate for a month at a time, so his vulnerability is significantly reduced. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

12 After reviewing your supporting documents, I will then issue a lender's letter so you can go shopping for your new home. I will work with your realtor who will take you to properties on the market with-in your payment comfort zone and your desired location. When you find homes that you are considering purchasing, provide me with the property address, taxes and whether or not there is an HOA or condo fee so that I can run figures for you. For government financing, if you are purchasing a condo, it will be necessary to verify that the condo is FHA approved through the following link - Approval Letter Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

13 Once you have a property that you desire, your agent will write an OFFER TO PURCHASE and present it to the seller s agent. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

14 Prior to writing your offer, you should have your real estate agent pull COMPARABLES for you. A comparable is a property that has similar construction and features as the property that you wish to make an offer on. The comparable properties must be in close proximity to the subject property and have sold within a reasonable amount of time (most recent sales holding more weight than older sales in the neighborhood). Although deals can be had, your offer should be realistic and take into consideration the current market value. Even in situations where the home is a foreclosure or a short-sale, it is unlikely that a low-ball offer will result in the owner letting the property go. With properties such as these where the bank is involved, you will be up against savvy asset managers who are only concerned with their bottom line. When you and your agent have determined a good offer price, contact me so that I can draft a lender letter specific to your offer. Your lender letter will disclose that I have reviewed your income, asset and credit documents listed on the previous pages and the details of your approval: loan type, loan term and automated-underwriting results. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

15 Your offer may give you the right to have a licensed home inspector go through the property to determine any all possible issues that could result in repair expenses for you later on. A good home inspector will spend hours with you going through every square foot of the property and educating you on your new home features. The inspection must be done within a specified time period so pay attention to the deadline that you have set forth in your contract. If the home inspector finds items wrong with the property, he will make a detailed list of the repairs. Your accepted offer may have a specific home inspection contingency that allows for you to ask the seller to either repair those items or provide financial compensation for them. Keep in mind that this would be considered a counter-offer and in any counter offer you risk the other party walking away from the agreement, so it may be best to not counter the offer with small repairs and risk voiding the contract. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

16 Once your home inspection is completed, you can lock your rate. Rates rise and fall with the market. Sometimes in a volatile market, rates can change 2-3 times per day. I will advise you weather to lock or float the rate but it is ultimately your decision when to lock the rate in. A point is 1% of the base loan amount. Points can be used to buy your rate down. 1 point does not necessarily buy your rate down 1%. As a loan officer, I work off of a scale that shows the buy down options. I will review these with you so you can make an educated decision as to whether it would be advantageous for you to pay upfront fees to reduce your interest rate. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

17 Next the bank will send out the appraiser to determine property valuation. The appraiser will visit the property and make comparisons to properties that have sold recently in the area and with similar construction and features. The appraiser's opinion can t be influenced by any parties involved in the transaction and he must independently arrive at the value of the home. The appraiser may cite items that must be repaired to bring property into compliance with government financing guidelines. These items must be rapidly addressed and evidence that the repair has been completed must be provided. In cases where a licensed contractor needs to complete the repair, a copy of the contractor's license must accompany the repair receipt. After your real estate agent returns to me evidence that the repairs have been completed, I will order a reinspection for the appraiser to go back out to the property and check that all was completed to his satisfaction. If the appraiser appraises the property for less than your contract price then you may have the right to ask the seller to reduce the sales price - this is true if an appraisal contingency is written into your sales contract. Also keep in mind that the banks will only finance based off of the appraised value, so if the seller is not willing to reduce their price in this instance then you may either have to come up with the cash difference or walk from the transaction. This is why it is important to check comparables prior to making your offer. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

18 Catherine Purcell Senior Mortgage Loan Officer Simultaneous with the home inspection and appraisal, the title company is busy clearing any issues that may be associated with the property so that they can deliver a free-and-clear title to you. The job of the title examiner is to make sure that the seller actually owns the property and that all transfers prior were completed correctly and evidenced correctly in the courts. You will be required to take out lender's title insurance to protect the bank from any unseen encumbrances that were not detected by the title examiner. You will be offered buyer's title insurance to protect your investment. If you are purchasing a property that has a history of foreclosures or short sales then I would recommend you obtain buyer's title insurance. This will protect you from someone coming out of the past and claiming ownership to the property.

19 You will need to obtain homeowner's insurance for your new property. Contact your agent and let them know that you are purchasing a new home. Your agent will ask for the mortgagee clause which is: Fairway Independent Mortgage Corporation 200 High Street 5th Floor Boston, MA

20 After you receive a ratified contract, your file moves into processing. The processor is a second set of eyes for your loan file. They verify employment, income and asset statement and review the appraisal for possible discrepancies. The processor may call you and ask for additional documentation or verification. It is important to respond to the processor quickly so that they can clear your file for the underwriter to review. Once the processor has completed their review, your file goes into underwriting. The underwriter may come back and ask for additional documentation but generally I ask for all documents upfront so it is unlikely that they will request more paperwork. Your file then goes back to the processor who will collect any additional documents that the underwriter needs. Once these are received, your file goes back to the underwriter for a final underwriting sign-off. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

21 On settlement day, everyone will meet at a pre-determined destination to sign documents. This is when you will receive your new set of keys to your new home. You are to bring your government issued identification and your social security card. If your funds were not previously wired from your bank account for your closing costs and pre-paids, you may need to bring a check to the settlement table. You should call your title company hours in advance to ask them how much the check is and who it is made payable to. Most settlement attorneys require a certified check, so be sure to ask your settlement company how they prefer to receive your closing funds. Your real estate agent, your attorney, the seller's agent and the seller will be at settlement. The settlement attorney represents your best interest and will review the documents prior to you signing. If you do not understand anything, please do not hesitate to ask questions. I will always be on call to explain documents and frequently show up at settlement to celebrate with you! Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com

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23 Annual Mortgage Fitness Check-up and Identity Theft Screening The key to building wealth in America starts with a plan. Saving and investing wisely will help get you there, protecting your credit and having your mortgage as part of your financial strategy will help keep you on target. Each year billions of dollars are lost to identity theft and even more wealth is lost to those who fail to finance their property properly. We can avoid identity theft by being aware of who and when we share important financial information. We also can guard against making it easy for those who would steal from us by shredding all important documents and never supplying information to those we don t know. You can catch a problem before it gets out of hand by carefully reading all financial information and by reviewing your credit report to spot unwanted activity or inquiries. As a valued client, I will reach out to you for a FREE annual review of your credit report. Failing to review your mortgage to be sure it is still working for you as well as it did when you first took it is a real hazard. This doesn t mean just checking to see if you can refinance to save a few dollars on your monthly payments. It means examining the terms and conditions to be sure that every dollar you spend on financing your home is either fully deductible or working hard to build your wealth. You see, a great rate on the wrong loan product isn t such a great deal. Just like incurring a lot of costs or lengthening of your term may not be wise to your plan. The important thing to know is why you are spending what you are spending. As a valued client, you are invited you to take part in our annual Mortgage Fitness Check-up and Identity Theft Screening. At no cost to you, my team of professionals will review your current mortgage situation to be sure that you are managing your debt obligations in the most effective manner. We will also review a current tri-merge credit report with you so we can show you exactly what all three credit repositories have to say about your credit history! Specific suggestions will be made toward building a stronger financial plan or to be sure the plan you have is still working well. Maintaining a high credit score can save you hundreds of thousands of dollars over your lifetime. Catherine Purcell Senior Mortgage Loan Officer catherinep@fairwaymc.com