I have been given the run around and I would like to know if I should go to a bank or a mortgage lender/broker?
Any information is greatly appreciated.
I also need more information on ARM Adjustable Rate Mortgage? What does 5/28 and other numbers mean when I see this? Is it a good idea to get a ARM? My FICO score is Good not Fair but Good.
I have a family member who purchased a home with a credit score of 580 through bank of america and they only make 36,000 a year. How is that possible. Bank of America Community Commitment program for first time home buyers.
In order to get a loan you must see if you are qualified for a loan.
So the first thing you should do is contact a mortgage broker so you can complete a loan application, after which he will run your credit report.
This credit report will give him your credit score. Get a cup of coffee or your favorite beverage when filling out the loan application this is not a 15 minute chore.
Your credit score will tell him what loan programs you are qualified for as well as the interest rate you can expect. This credit score will tell if you are able to get a 100% loan and if not how much cash you have to bring to the table as your down payment.
There are lots of documents and information the mortgage broker will need. I will give you a few to get you started.
#1 Six months of all bank statements you use currently, as well as any statements from your 401k at your place of employment
#2 One months of pay stubs from all that are going on the mortgage.
#3 Two years of federal income taxes and W-2s
After discussing the best loan program for you and agreeing on the program you want, the mortgage broker will issue you a pre-approval letter. This person will explain to you all about the ARMs and if you are qualified to get one as well as the pro and cons.
Now about the numbers 2/28, 3/27, these are thirty year loansthe first number indicate how long they are fixed until they covert to an adjustable. Based on the index they are tied to will determine if they will go up or down and the amount of actual money the adjustable will be required to pay.
Don’t let anyone scare you away from the ARMs they are good if used properly. You have to remember that the rate you will start paying is temporary and after the fixed period is up the mortgage at that time will turn into an adjustable rate, which could cause your monthly payment to go up. Some are adusted once, while others adjust every 3, 6 or yearly. So make sure that you read the small print on your loan docs.
Now once this has been established you should connect up with a real estate agent to find you a home. Upon finding a home you like the real estate agent will then prepare a sales contract for you and the seller to sign.
The mortgage broker will order an appraisal of the house to prove the value.
Once all the documents necessary has been collected the mortgage broker will order loan docs for the program that you agreed to earlier. Again don’t plan on spending a lunch hour there to sign loan docs this is a process so be prepared to be there for awhile.
Don’t sign the loan docs if anything change from what the mortgage broker explained to you. Call and get an explanation.
I hope this has been of some use to you, good luck.
Honestly, I know that sometimes some mortgage companies do give the run around, but also, you need to be at their desk as frequently as possible. A lot of people get financed through banks, and things like “Lending Tree”.. Which most of the banks are out of state, so you really dont see the paper work. My suggestion is to find a new mortgage company. Research them, contact their mortgage ethics board to get information, do a BBB on them, do good research. Mortgage companies have better outlets to find you the best rate.. What you dont see is most places like “Lending Tree” Lenders will up your interest rate to give themselves more money, or charge way high origination fees. I tried to get a loan through a Lending Tree Lender and they wanted to charge me $ 9,999 to originate the loan!
Adjustable Rate Mortgages are a great way to boost your credit score, over a short period of time if you dont miss a payment, to where you can get a lower rate later. Though, with the ARM, you also face that maybe in 2/3/5 years, the rates will go through the roof.. If you can afford it, I would go for a Fixed 15 year.. The interest rate is the lowest, but it also is more expensive on the payments. There is also the option of a Fixed 30 year and a Fixed 40 year.. I dont really suggest an ARM, personally.. A lot can happen in 2/3/5 years and you could be stuck paying a major “Pre-Payment Penalties” which can be up to 6% of the loan or higher… With 15/30/40 year fixed, alot of the time they dont have “Pre-Payment Penalties” so if something happens in 2 years and you have to move, you dont get hit with that kinda stuff.. Any loan you take, I would suggest no pre-payment penalties or “soft pre-payment penalties”.. the 5/28 generally means that you have to refinance in 5 years (5 Year ARM) and a balloon payment for the remaining about in 28 years.. Hope that helps! If you have anymore questions, my contact information is on my account… GOOD LUCK!!!
Ask your family and friends for a referral to a mortgage broker. They will be able to answer all your questions, and let you know how much you can borrow, costs involved and repayments. They are paid by the bank, so don’t cost you anything.
Sometimes using a broker can help because if your credit is questionable they can broker out thatloan to a number of different banks that can possibly accept it. If you are using a BANK bank (like meridias capital, etc.)they ARE the bank and keep the loan in house and a guideline is a guideline, and if you don’t meet that guideline things can get stressful and messy! Shop around, you can run your credit many times for the same reason (lenders looking at it) for up to 15 days and it wont affectyour score. See who can give you the best breakdown/deal/program. It’s called a good faith estimate (obviously you have the property in mind, right?)
ARM’s are good and bad. They are good if you know you are not going to be in thehouse for more than 5 years, bad if you are going to be there longer because in 5 years they will adjust. You will only be locked into that rate you close escrow at for 5 years. Either way, lately, you have to have a credit score of 680 or higher to even be considered for a home loan of any kind.
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