Your Mortgage Questions Answered Part 1

By
Mortgage and Lending with Guaranteed Rate NMLS ID: 21441

Part 1

Why should I buy vs. rent?
Paying rent is like lining your landlord’s pockets — you pay while they build equity, write off the interest on their mortgage and deduct their property taxes. When you own your home, it is an investment. Over the long term, the worth of a home generally increases, which means your home may make you some money when you decide to sell, or act as collateral for a loan that can pay for debt consolidation, medical bills, college tuition or a fabulous vacation. Plus, your home is yours, to paint, decorate and renovate any way you like!

What is the difference between a mortgage broker and a mortgage lender?
A mortgage broker is a middleman who acts as a go-between for the borrower and the lenders. Mortgage Master is a direct lender, so you’re dealing directly with the company that will actually lend you the money to purchase or refinance your home. The entire loan process is handled under our own roof from origination to funding!

What is my first step in obtaining a home loan?
Getting pre-qualified is your very first step. You’ll give me information on your income, credit and bills, and I’ll tell you whether you may qualify for a loan and a general idea of how much it might be for. We’ll discuss any questions you have about mortgages and financing too. Once I determine you should be able to secure financing from us you can start interviewing real estate agents. I work with the best agents in the business and will be happy to make an introduction.  Next, you’ll gather some more information for me and I can get you pre-approved for a mortgage!
 
When you are pre-approved, you’ll know exactly how much home you can afford, which will make your home shopping easier (and less painful since you won’t waste time looking at — and falling in love with — houses that are out of your budget). Where pre-qualification is a sort of educated guess of the buyer’s purchasing power, pre-approval says you would definitely be approved for the loan.

It’s important that we look at your total financial situation and decide what payments you will be comfortable with. Buying a home is the biggest purchase most people make in their lifetime. Let’s do it the right way.

What is the difference between conforming and nonconforming loans?
A conforming loan follows the guidelines set forth by Fannie Mae and Freddie Mac and currently has a loan limit of $417,000 in the 48 contiguous states (these limits can change yearly).

A non-conforming mortgage may be for a higher amount than the limit set on conforming loans. In some instances the term may also refer to a loan where the borrower has credit issues or unusual documentation. Non-conforming loans generally have higher interest rates and you may need to put down more cash to secure your loan. Jumbo loans are non-conforming loans.

How much house can I afford?
We look at your income, assets and expenses, we then we plug those numbers into calculations to determine the percentage of your income that can be devoted to your housing payment.
 
We’ll take a look at current interest rates, local property taxes and homeowner’s insurance costs as well as the mortgage payment itself, as these are all factors in your housing costs.

Part 2 Coming Soon!

Comments (1)

Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

This is good information for new buyers . . . good idea to break it into two parts so they will look for your next installment!

Feb 14, 2013 07:59 AM