Financial Information and
Financing Resources
Before you start shopping
Before you begin the process of shopping for a home you need to know exactly how much you can afford. Keeping in mind that what you QUALIFY for and what you can AFFORD might be two different numbers! As a Realtor® I would feel awful if I showed you homes that were, ultimately out of your price range. Its like holding a chocolate ice cream cone out...and then telling you "nope, sorry, you can't have it!"
Your best first step is to find a lender, get pre-qualified for a loan. This is a fairly simple and straight forward process that takes just a short period of time, and can be done with you answering some basic questions regarding your income, debt, and expenses. That way you are armed with information to begin your search.
Pre-Qualified or Pre-Approved?
Getting pre-approved is a little different. This happens after you meet with a lender/broker and have provided them some detailed information and DOCUMENTATION of your financial situation. A good lender could take a few hours with you, discuss your needs, your wants, and your situation and really offer you some good financial counseling to help you. It can also be accomplished in about 30 minutes if you don't have questions or other issues to discuss. You will need information like tax statements, pay stubs, etcetera. At the end of this process, they will be able to give you a PRE-APPROVAL letter which can be used in conjunction with any offer you may write. It lends weight to your offer, makes it more attractive to the seller, giving them confidence that you can actually buy the home!
You have choices. You can work with your bank directly or you can work with a Mortgage Broker
I would recommend that you see a Mortgage Broker. Banks have access only to the programs and lending packages they offer. A Mortgage Broker will have access to a broader set of lending programs and can work with you to find a lender and loan program that works best for you.
Other Factors to Consider When Comparing Loan Packages
Which loan is the best for you depends on your situation. It can be complicated to compare different loan packages, and you have to be comparing apples to apples, so to speak. Make sure you understand what the differences are. Below are some definitions (adopted from the Ginnie Mae web-site: http://www.ginniemae.gov/resources/mortgage_terms.asp to help you do your research effectively).
Points - Charges levied by the lender based on the loan amount. Each point equals one percent of the loan amount; for example, two points on a $100,000 mortgage equals $2,000. Discount points are used to buy down the interest rate. Points can also include a loan origination fee, which is usually one point.
Interest Rate - The simple interest rate, stated as a percentage, charged by a lender on the principal amount of borrowed money. There is also the "Annual Percentage Rate" which takes into account points and other finance charges, for the projected life of a mortgage. Disclosure of APR is required by the Truth-in-Lending Law and allows borrowers to compare the actual costs of different mortgage loans.
Closing Costs / Fees -
Costs payable by both seller and buyer at the time of settlement, when the purchase of a property is finalized. These costs can be up to ten percent of the mortgage amount and usually include but are not limited to the following:
|
Fees Paid to the Lender |
Fees Paid in Advance |
Other Charges |
Origination fee
Discount points
Credit report fee
Appraisal fee
Assumption fee if loan is assumed
|
Interest from the closing date to the beginning of the 1st payment
Hazard insurance premium
Mortgage insurance premium
|
Title search and title insurance
Sales commissions
Legal and recording fees
Inspection and survey fees
Property taxes and other adjustments
Processing and document preparation fees |
Here are some audio files from Real Estate Talk that you may find helpful:
07 July - Kelly Gardner, Pinnacle Mortgage. Discussion on Senate Bill pending in Oregon which could have a major impact on lending practices (Senate bill 965) (Downloadable Audio)
21 July - Bill Higby of Willamette Community Bank will be giving information about VA, RDA, and FHA Loan programs (Downloadable Audio)
20 October - Kelly Gardner, Pinnacle Mortgage was here to discuss "How to Harness the Equity in your home." We covered a lot of ground in explaining why separating the equity from your home could give you the opportunity for more productive investment strategies. This show was so full of information, we have scheduled a follow on with Kelly for 24 November. (Downloadable Audio)
15 November - Bill Higby, Willamette Community Bank. Buying investment property is one way to financial freedom. What are the financing considerations for investment versus residential property? What do you need to know to be successful and is NOW a good time to take the plunge into investment property? Listen for Bill's timely information. (Downloadble Audio)
24 November - Kelly Gardner, Pinnacle Mortgage was here to finish our conversation on harnessing your equity. Listen to our show from 20 October, and get ready for more of Kelly's excellent information and strategies on how to manage your financial security. (Downloadable Audio)
Mortgage Brokers that I have worked with, trust, and am happy to recommend to you:
 Scott Foss, Mortgage Consultant
Pinnacle Mortgage
e-mail: scott@pinnacleloans.com
website: www.reallygoodloan.com
Office: (541) 766-5922
Fax: (541) 791-4348
Cell: (541) 231-4323
|
