Pre-qualification starts the loan process. Once a lender has gathered basic information about a borrower’s income and debts, an opinion can be made as to how much the borrower should qualify for in purchasing a house. Since loan programs vary between credit, debt and down payment requirements, borrowers should get pre-qualified for each loan type that they qualify for and are considering.

Being pre-qualified is only a limited analysis and does not hold a lot of weight when it comes to negotiating a contract or reassuring a seller. There are many aspects to fully qualifying that could change a borrower’s ability to qualify for a mortgage. Some of these things are; credit, length of employment, type of income, debt, liens or judgments, property type or condition and other issues that will be brought up during the approval process.

Although it is tempting to start your home search prior to getting a pre-approval, we suggest you get that step completed sooner than later so you are armed with the knowledge of your real shopping budget and the power to negotiate the best deal.

What is a Pre-Approval?

Being Pre-Approved lets you know your price and term limitations and therefore removes some of the stress of finding the perfect home.

Being pre-approved also empowers you during the negotiation process. It gives the seller confidence in knowing your finances are one less aspect of the transaction they need to worry about. You’ll need a pre-approval to bid on a bank owned or short sale home. Your offer won’t even be considered if there are several offers on a home if you don’t have a pre-approval.

A pre-approval gives the seller assurance you can afford their home and therefore your offer is given serious attention. This is achieved after the lender has verified all information you have submitted in the application process.

Is There a Cost to Apply?

Generally no, but occasionally the cost of a credit report will be charged. All other up-front fees, such as an appraisal or application fee that may apply, will be disclosed to you as part of the application process and collected following your receipt of the early Truth-in-Lending disclosure and your approval to continue with the application.

How Long Will the Loan Process Take?

The loan approval and funding time frames vary depending on the type of transaction and the complexity of your personal finances. The process can take as little as 10 days, and sometimes up to 45 days.

What is a Lock-in Rate?

The lock-in rate represents the interest rate you choose and will be the interest rate used to factor your monthly payment. The lock-in secures the interest rate during the process of your loan approval, as long as your loan is processed and closed prior to the rate expiration date. This date is given to you when you lock-in the rate.

When Can I Lock-in my Rate?

You can lock-in your interest rate once you have an accepted offer on a property. Your loan officer will discuss these options with you upon taking your loan application.

How Long is my Rate Lock Valid?

Depending on the type of transaction and the time you need, lock periods can be valid anywhere from 15 days to 180 days.

Refinances

Should I Refinance?

Deciding to refinance takes careful consideration. There are several factors to consider and a SNMC loan professional can help you adequately weigh these complex issues.

Even a modest reduction in the interest rate can trim your monthly payment. The significance of such savings in any scenario will depend on your income, budget, loan amount, closing costs and the change in interest rate. A SNMC loan professional can help calculate the different scenarios for you to determine if this would be financially advantageous. Consulting your tax advisor is also encouraged, as your personal tax situation may affect your decision.

What Documents Will I Receive at Closing?

At closing, you’ll review, sign and receive copies of all legal documents that are recorded for the property you’re purchasing or refinancing. You’ll also receive all pertinent information regarding your mortgage payment and servicing information for your new loan.

Can I Still get a Home Mortgage if I’ve Experienced Credit Challenges?

Obtaining a home loan is possible even with poor credit. If you have had credit problems in the past, a lender will consider you to be a risky borrower to lend to. To compensate for this added risk, the lender will charge you a higher interest rate and usually expect you to pay a higher down payment on your home purchase (typically 20-50% down). The worse your credit is, the more you can expect to pay for an interest rate and a down payment. Not all lenders choose to lend to risky borrowers, so you may have to contact several before finding one that will. Contact us to get an objective opinion on your credit and financial situation. Whether your situation calls for a short-term solution or a long-term strategy, we will give you options that will empower you to make an educated decision.

Reverse Mortgages

What is a Reverse Mortgage?

A reverse mortgage is a type of home equity loan that allows homeowners to convert some of the equity of their home into cash while retaining home ownership.

Reverse mortgages are backed by the government and FHA insured. Reverse mortgages enable eligible homeowners to access money built up as equity in their home. This loan is designed for seniors 62 and older who own and occupy the home.

Benefits of a reverse mortgage include tax-free funds, no loan repayment, no income, medical or credit requirements. The homeowner retains ownership for life, so long as they occupy the home.