TOP 25 Questions TOP 25 Questions about Buying Your First about Buying Your First

HomeHome

Susan Harvey – Loan Officer NMLS # 275224

(813) 523-7565 sharvey@annie-mac.com CLICK HERE to apply online

#1 What is a Mortgage and #1 What is a Mortgage and Note?Note?

MORTGAGEMORTGAGE = = A lien A lien

against the property that against the property that

stays in place until the stays in place until the

mortgage Is paid in full.mortgage Is paid in full.

NOTENOTE = = Your writtenYour written

promise to pay back the loan.promise to pay back the loan.

# 2. Are there Special # 2. Are there Special Programs for First Time Programs for First Time

Home Buyers? Home Buyers?

Yes !Yes ! There are several Affordable First There are several Affordable First

Time Home Buyer Options, such as Time Home Buyer Options, such as USDA Financing, the Bond Program, USDA Financing, the Bond Program, FHA Loans, and My Community.FHA Loans, and My Community.

# 3. What steps need to be # 3. What steps need to be taken to secure a loan? taken to secure a loan?

Complete a loan application Complete a loan application Documentation needed Documentation needed :: PAYSTUBSPAYSTUBS – covering the most recent 30 day pay period – covering the most recent 30 day pay period W-2/1099 Forms W-2/1099 Forms for most recent 3-years for most recent 3-years IRS TAX RETURNS- IRS TAX RETURNS- for past 3-years (send all pages/sign & date)  for past 3-years (send all pages/sign & date)   BANK STATEMENTS BANK STATEMENTS - covering most recent 3-months activity  - covering most recent 3-months activity  

Other Information requiredOther Information required:  :   12-Month Rental History / Name & Contact Info for Landlord12-Month Rental History / Name & Contact Info for Landlord Amount of Total Household Income Amount of Total Household Income Amount of Total Assets for Household Amount of Total Assets for Household

# 4. What’s the Difference # 4. What’s the Difference between Pre-Qualified and between Pre-Qualified and

Pre-Approved ?Pre-Approved ? Pre-QualifiedPre-Qualified May be done over the Phone / No Obligation / No CostMay be done over the Phone / No Obligation / No Cost No Paperwork Required - “Ball-park Guesstimate”No Paperwork Required - “Ball-park Guesstimate” Value = WorthlessValue = Worthless

Pre-ApprovedPre-Approved May be done over Phone / No Obligation / No CostMay be done over Phone / No Obligation / No Cost Income & Asset Documentation Required - Actual NumbersIncome & Asset Documentation Required - Actual Numbers Value = PricelessValue = Priceless

# 5. WHAT DETERMINES YOUR # 5. WHAT DETERMINES YOUR

CREDIT SCORE CREDIT SCORE

# 6.# 6. HOW CAN I FIND OUT HOW CAN I FIND OUT INFORMATION ABOUT MY CREDIT INFORMATION ABOUT MY CREDIT

HISTORY?HISTORY?

EquifaxEquifax ExperianExperian TransunionTransunion Call me for a copy of your ReportCall me for a copy of your Report

# 7. HOW DO I CHOOSE THE # 7. HOW DO I CHOOSE THE

BEST LOAN - PROGRAM FOR ME?BEST LOAN - PROGRAM FOR ME?

Ask Yourself these questionsAsk Yourself these questions How long do you plan to live in this home?  How long do you plan to live in this home?   Do you expect your income to increase over the next few Do you expect your income to increase over the next few

years?  years?   Which is more important to you – paying off your home as Which is more important to you – paying off your home as

quickly as possible or having the lowest payment possible?quickly as possible or having the lowest payment possible? What are your dreams and goals for the future?  What are your dreams and goals for the future?   Do you wish to be free of mortgage debt as your children Do you wish to be free of mortgage debt as your children

approach college age or as you prepare for retirement?approach college age or as you prepare for retirement?

# 8. WHAT TYPES OF LOANS ARE # 8. WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE AVAILABLE AND WHAT ARE THE

ADVANTAGES OF EACH?ADVANTAGES OF EACH? Fixed Rate MortgageFixed Rate Mortgage Predictable Predictable Rate and payment stay the same for term of loanRate and payment stay the same for term of loan Typically 15 or 30 yearTypically 15 or 30 year Hybrid ARM (Adjustable Rate Mortgage)Hybrid ARM (Adjustable Rate Mortgage) Payment is “fixed” for the initial period, then increases or decreases Payment is “fixed” for the initial period, then increases or decreases

on a regular schedule with interest rate change and life-of-loan on a regular schedule with interest rate change and life-of-loan caps.caps.

““Fixed” periods range from 5 Year / 7 Year/ 10 Year. Interest Rates Fixed” periods range from 5 Year / 7 Year/ 10 Year. Interest Rates are typically lower than Fixed Mortgage Rates.are typically lower than Fixed Mortgage Rates.

Interest-Only Payments- Interest-Only Payments- available only on certain ARM’Savailable only on certain ARM’S

# 9. WHEN DO ARMS MAKE # 9. WHEN DO ARMS MAKE SENSE?SENSE?

Expect Increase in IncomeExpect Increase in Income Short term PurchaseShort term Purchase

# 10. DEFINITIONS AND # 10. DEFINITIONS AND NADVANTAGES OF 15- AND 30-NADVANTAGES OF 15- AND 30-

YEAR LOAN TERMS?YEAR LOAN TERMS? Principle – Principle – The original amount of money that was borrowed.The original amount of money that was borrowed. Interest –Interest – The amount the lender charges you for borrowing the The amount the lender charges you for borrowing the

moneymoney 30-Year30-Year::

Larger tax deductions.   Larger tax deductions.   15-Year15-Year:: Loan is usually made at a lower interest rate.  Equity is built faster Loan is usually made at a lower interest rate.  Equity is built faster

because early payments pay more principal. because early payments pay more principal.

# 11. WHAT HAPPENS IF # 11. WHAT HAPPENS IF INTEREST RATES DECREASE AND INTEREST RATES DECREASE AND

I HAVE A FIXED RATE LOAN?I HAVE A FIXED RATE LOAN?

Investigate Refinance OptionsInvestigate Refinance Options

# 12. WHAT ARE DISCOUNT # 12. WHAT ARE DISCOUNT

POINTS?POINTS? 1 Point = 1% of your Loan Amount1 Point = 1% of your Loan Amount Paying Points allows you to get a Paying Points allows you to get a

Lower Interest RateLower Interest Rate Financial Planners recommend to Financial Planners recommend to

pay points if you plan to stay in pay points if you plan to stay in home long termhome long term

Points Tax Deductible on a Home Points Tax Deductible on a Home PurchasePurchase

# 13. WHAT IS INCLUDED IN A # 13. WHAT IS INCLUDED IN A MONTHLY MORTGAGE PAYMENT?MONTHLY MORTGAGE PAYMENT?

PrincipalPrincipal InterestInterest Real Estate TaxesReal Estate Taxes Home Owners InsuranceHome Owners Insurance Mortgage InsuranceMortgage Insurance Homeowners Association Fees are Homeowners Association Fees are

Not Escrowed, however, they are Not Escrowed, however, they are your responsibility to payyour responsibility to pay

# 14. WHAT IS AN ESCROW # 14. WHAT IS AN ESCROW

ACCOUNT? DO I NEED ONE?ACCOUNT? DO I NEED ONE?

Established by your Lender to Pay Established by your Lender to Pay for your Taxes and Insurance from for your Taxes and Insurance from your monthly mortgage paymentyour monthly mortgage payment

May be optional if your Down May be optional if your Down Payment amount is 20% or more of Payment amount is 20% or more of the Sales Price (check with lender)the Sales Price (check with lender)

# 15. HOW MUCH MONEY WILL I # 15. HOW MUCH MONEY WILL I NEED AT CLOSING?NEED AT CLOSING?

You will need sufficient money to You will need sufficient money to cover:cover:

Down Payment of 3 .5% (-0- on Down Payment of 3 .5% (-0- on USDA & VA loans)USDA & VA loans)

Closing Costs (including Closing Costs (including Escrows)Escrows)

First Year’s Premium for Home First Year’s Premium for Home Owners InsuranceOwners Insurance

InspectionsInspections

# 16.WHAT IS “ LOAN TO VALUE” # 16.WHAT IS “ LOAN TO VALUE” (LTV) ?(LTV) ?

Amount of Money you Amount of Money you borrower compared with borrower compared with Purchase Price or Purchase Price or Appraiser ValueAppraiser Value

# 17. # 17. WHAT MAKES UP CLOSING WHAT MAKES UP CLOSING

COST?COST? Attorney's or escrow fees Attorney's or escrow fees   Property taxes (to cover tax period to date)  Property taxes (to cover tax period to date)   Interest (paid from date of closing to 30 days before first Interest (paid from date of closing to 30 days before first

monthly payment)  monthly payment)   Loan Origination fee (covers lenders administrative cost)  Loan Origination fee (covers lenders administrative cost)   Recording fees  Recording fees   Survey fee Survey fee   First premium of mortgage Insurance (if applicable)  First premium of mortgage Insurance (if applicable)   Title Insurance (yours and lender's)  Title Insurance (yours and lender's)   Loan discount points  Loan discount points   First 2-3 payments to escrow account for future real estate First 2-3 payments to escrow account for future real estate

taxes and insurance  taxes and insurance   Paid receipt for homeowner's insurance policy (and fire Paid receipt for homeowner's insurance policy (and fire

and flood insurance if applicable)  and flood insurance if applicable)   Any documentation preparation fees Any documentation preparation fees Third Party Appraisal FeeThird Party Appraisal Fee

#18. WHAT RESPONSIBILITIES #18. WHAT RESPONSIBILITIES DO I HAVE DURING THE DO I HAVE DURING THE

LENDING PROCESS?LENDING PROCESS? Be sure to read and understand everything before you sign.  Be sure to read and understand everything before you sign.   Refuse to sign any blank documents.  Refuse to sign any blank documents.   Do not buy property for someone else.  Do not buy property for someone else.   Do not overstate your income.  Do not overstate your income.   Do not overstate how long you have been employed.  Do not overstate how long you have been employed.   Do not overstate your assets.  Do not overstate your assets.   Accurately report your debts.  Accurately report your debts.   Do not change your income tax returns for any reason. Do not change your income tax returns for any reason. Tell the whole truth about gifts. Tell the whole truth about gifts. Do not list fake co-borrowers on your loan application. Do not list fake co-borrowers on your loan application.   Be truthful about your credit problems, past and present.  Be truthful about your credit problems, past and present.   Be honest about your intention to occupy the house  Be honest about your intention to occupy the house   Do not provide false supporting documents. Do not provide false supporting documents. Provide requested documentation quicklyProvide requested documentation quickly Do not move money around your accountsDo not move money around your accounts Do not have any credit inquiries or make any new purchasesDo not have any credit inquiries or make any new purchases

# 19. WHAT IS RESPA?# 19. WHAT IS RESPA?

Real Estate Settlement Procedures ActReal Estate Settlement Procedures Act Protects you the borrower from Protects you the borrower from

Lending AbusesLending Abuses All costs associated with the loan must All costs associated with the loan must

be fully disclosed to you.be fully disclosed to you. HUD Phone Number 800-669-9777HUD Phone Number 800-669-9777

# 20. WHAT HAPPENS AFTER I'VE # 20. WHAT HAPPENS AFTER I'VE

APPLIED FOR MY LOAN?APPLIED FOR MY LOAN? Closing typically occurs between 4-6 weeksClosing typically occurs between 4-6 weeks Lock Interest RateLock Interest Rate Respond immediately to Respond immediately to

lender requestslender requests Once loan receivesOnce loan receives

final approval you mayfinal approval you may

schedule a Closing Dateschedule a Closing Date

# 21. WHAT SHOULD I LOOK OUT # 21. WHAT SHOULD I LOOK OUT FOR DURING THE FINAL WALK-FOR DURING THE FINAL WALK-

THROUGH?THROUGH?

Examine every corner of the empty houseExamine every corner of the empty house Check Floor to CeilingCheck Floor to Ceiling Be sure Seller fixed any problems Be sure Seller fixed any problems

promisedpromised Make sure everything is acceptable to Make sure everything is acceptable to

you you BeforeBefore you close you close

# 22. WHAT CAN I EXPECT TO # 22. WHAT CAN I EXPECT TO HAPPEN IMMEDIATELY PRIOR HAPPEN IMMEDIATELY PRIOR

TO CLOSING ?TO CLOSING ? Arrange to either Pay for your Home Owners Arrange to either Pay for your Home Owners Insurance Policy (and send Payment Receipt to Insurance Policy (and send Payment Receipt to Lender) OR have your Insurance Agent send a copy Lender) OR have your Insurance Agent send a copy of the Policy and an Invoice for Payment to your of the Policy and an Invoice for Payment to your LenderLender

Contact your Lender or Realtor to Obtain Wiring Contact your Lender or Realtor to Obtain Wiring Instructions for Title Company/Closing Agent. All Instructions for Title Company/Closing Agent. All funds needed from you at closing now must be funds needed from you at closing now must be Wired (No Cashiers Checks allowed!) Wired (No Cashiers Checks allowed!)

Review your Final HUD-1 Settlement Statement Review your Final HUD-1 Settlement Statement Prior to Loan ClosingPrior to Loan Closing

Ask your Realtor when you can expect to receive Ask your Realtor when you can expect to receive the keys to your new home the keys to your new home

# 23. CAN I PAY OFF MY LOAN # 23. CAN I PAY OFF MY LOAN

AHEAD OF SCHEDULE?AHEAD OF SCHEDULE?

YesYes There are No Pre-Payment Penalties There are No Pre-Payment Penalties

on our loans.on our loans.

CONGRATULATIONS! You are CONGRATULATIONS! You are now a Homeowner!now a Homeowner!

Susan Harvey - Loan OfficerSusan Harvey - Loan Officer

NMLS# 275224NMLS# 275224(813) 523-7565(813) 523-7565

sharvey@annie-mac.com

Apply online (24/7)Apply online (24/7) https://susanharvey.annie-mac.comhttps://susanharvey.annie-mac.com