BUYING   |   SELLING   |   RENTING   |   AGENTS   |   CAREERS   |   SEMINARS   |   CONTACT


CENTURY 21 Jeff Keller Realty

(706) 796-0106 | (800) 423-1292

Guide to Buying a Home

Securing Financing

 

Pre Qualification vs. Pre Approval

Pre-Qualification is only a loan agent's opinion that you'll be able to obtain financing. No verifications are made, so formal approval is not issued.
 
Pre-Approval means your loan application has been taken through a rigorous procedure. Pre-approval saves you the time of looking at houses you can't afford.

Pre-approved buyers are ahead in the home buying game. If you make an offer on a home and then apply for a loan instead of the other way around, you are at the mercy of the lender who now knows that you don't have time to shop around.

 

A pre-approval letter from a lender will also give you an edge when multiple offers have been made on a house. Pre-approved buyers generally close escrow more quickly, since most of the paperwork has already been taken care of.

 

Mortgage Overview

When considering your financing options, you'll want to review many different things about the loans offered to you. In this next section you'll find a basic overview of home loan features and the things you should consider as you shop for a lender or loan.

 

What kind of lender are you borrowing from?

Home loans are available to consumers from thrift institutions - commercial banks, mortgage companies, credit unions and mortgage brokers.

A Mortgage Broker is unlike other lenders in that the broker does not lend money to you directly. A broker will help find you a lender and secure the terms of your arrangement.


Mortgage Broker vs. Traditional Lender
A Broker may have access to several lenders and therefore can offer you a wider selection of loan products and terms. He or she can help you shop for the best deal based on your circumstances. (A Broker is not obligated to find you the best deal possible, so be sure to askquestions.)

For their work, brokers are paid a fee in addition to the lender's origination fees. Brokers set their own compensation, so you'll need to ask anyone you speak to how their fees are determined.

 

What are the terms of the loan?
All the terms of a loan matter, not just the interest rate. You'll want to get a complete picture and break down of what a given offer means to you on a monthly basis as well as how much money you'll be spending over the life of the loan.

At a minimum, you should request quotes with a few different scenarios and compare the financial impact of each situation before you determine your best course of action.

 

Loan Type/Rate Types

 

Fixed Rate (Traditional) Loan

These loans are usually structured with repayment terms of 15, 20 or 30 years. The lender will agree to charge a fixed interest rate over the life of the loan. With this loan type, your monthly mortgage payments will remain the same for the length of the term.

 

Adjustable-Rate Loans (ARMs)
Also known as variable-rate loans, ARMs often offer a teaser rate for the initial period of the loan. This introductory interest rate is usually lower than rates offered for fixed rate mortgages. The interest rate will fluctuate over the life of the loan based on market conditions. Changes in rate happen at certain time periods, and the lender can set both a maximum and minimum on the rate of
fluctuation.

 

Federal Housing Administration (FHA) Loans
Federal Housing Administration (FHA) insured loans are made by private lending intuitions such as banks, savings & loans, or mortgage companies to eligible borrowers for the purchase of a home. To secure an FHA loan, a borrower must apply and qualify with a certified FHA Lender. Additionally, eligible borrowers must be able to pay a minimum of 3.5% of a home's purchase price. If the loan is approved, FHA will insure a portion of the loan's value to the lender.

 

Veterans Administration (VA) Guaranteed Loans
VA Home loans are available to qualified Veterans and their spouses. Private lending institutions issue the loans which are in turn guaranteed by the Veteran's Administration. The VA does not require any down payment on VA Guaranteed loans and allows the borrower to receive a competitive, fixed interest rate.

 

Points
The lender or broker can charge you points on your mortgage. One point equals 1 percent of the loan amount. These are simply fees paid to the lender or broker that are often linked to the interest rate, and are usually paid in cash to the lender or broker at closing. A lender may offer you a lower interest rate, but charge more points, so it's important to compare offers.

 

What Additional Fees will be required in this Loan?
Most loans have additional fees. You can sometimes borrow the money need to cover these fees, but that will obviously increase the overall amount of debt you undertake. Some fees are paid up front, and others are not due until closing.


Loan Origination Fees
The institution that actually loans you the money will generally charge on origination fee for processing the loan. They are often expressed as a percentage of the amount of the loan.

 
Underwriting Fees
Certain lenders will charge a fee to investigate your creditworthiness and determine if you are likely to repay your loan.
 

Broker Fees
Typically paid at closing, a mortgage broker may charge you a fee in addition to the origination fee. If you are working with a broker, be sure to check with them what their fee is.
 

Transaction / Settlement / Closing Costs
These fees lump together several charges for: application fees, title examination, abstract of title, title insurance, property survey fees, deed preparing fees, other mortgage fees and settlement documents, attorney fees, recording fees, notary fees, appraisal fees and credit report fees. The Real Estate Settlement Procedures Act requires that a lending institution provide a borrower with a good faith estimate of closing costs at the time of application. This estimate must list each expected cost as a range or as an exact amount where applicable.

 

The Down Payment / Private Mortgage Insurance
The largest upfront cost in purchasing a home is the down payment. Most traditional lenders expect borrowers to put at least 20% of a loans total amount down. Borrowers who are unable to do so are required to purchase Private Mortgage Insurance (PMI). This insurance protects the lender in case of
default by the borrower.

 

Interview Questions for your Lender

1. What kind of loans do you offer?
2. What kind of loan would you recommend for me? What are the advantages and disadvantages of this loan structure?
3. What is the current mortgage interest rate? Is the rate quoted the lowest for that day or week?
4. What is the Annual Percentage Rate (APR) of an offered loan?
5. Is the loan rate adjustable or fixed?
6. What are the Discount Points and Origination Fees?
7. What are all the Costs?
8. If the rate is adjustable, how will rate and loan payment vary?
9. What are the Qualifying guidelines for this loan?
10. What is the lender's required down payment for this loan?
11. What documents will need to be provided?
12. What are the closing costs?
13. Will the Lender Guarantee the GFE?
14. Does the lender offer a loan rate lock? Is there a fee for the rate lock?

  

 

Your Search Starts Here

Minimum Price Maximum Price
Minimum Bedrooms Minimum Bathrooms
Minimum Square Foot Select City
 


Advanced Search
 

Customer Login

Email Address
Password


 
Create Account |
Forgot Your Password?
Questions or Concerns?  Contact us today for a free, professional consultation.    
     
 
Find a Home | Rentals | Careers | Free Seminars | HUD Homes | Foreclosures | Augusta, GA Area Information | Contact Us
 We Sell Homes In:  Augusta, GA | Hephzibah, GA | Fort Gordon, GA | Martinez, GA | Evans, GA
 Grovetown, GA | Harlem, GA | Waynesboro, GA | Appling, GA | Thomson, GA | Blythe, GA 
 Keysville, GA | Midville, GA | Wrens, GA  | Lincolnton, GA |  North Augusta, SC | Aiken, SC
 Beech Island, SC | Edgefield, SC | Graniteville, SC | McCormick, SC
 
 
This website was designed by and is managed by Webster Marketing Solutions, Ltd.