Mortgage Information

General Loan info/how to apply/what to expect

Buying a home should be a great experience.  The right mortgage professional will help guide you through this process with ease.  You should expect your mortgage professional to educate you on rates, terms and types of loans. 

To get pre approved, your credit scores and income need to be verified.  The type and amount of loan you qualify for will be determined by these variables. 

Be prepared to the have the following information and documentation for all applicants at your initial meeting:

1) Name, current address, social security number and date of birth. 

2) Two most recent paystubs. 

3) Last two years W-2’s and/or tax returns if self employed.

After you are pre approved, you will receive a pre approved letter to give to your real estate professional to use when submitting on offer on a home.  Have fun shopping!

Types of loans

There are basically 3 different types of loans.  Government insured loans (FHA, VA, USDA Rural), Conforming loans (also known as conventional loans), and Non conforming loans (also known as sub prime). 

Almost all of these loans are available in 30, 25, 20, 15, and 10 year terms.  Conforming and government loans do not have pre payment penalties and can be paid in full early without penalty. 

For loans above 80% of the purchase price, you will be required to carry Private Mortgage Insurance (PMI) until your principal balance falls below 80%.  Credit scores dictate the type of loan you qualify for; however, the minimum score for FHA and USDA Rural loans is 620. 

If you are eligible for a VA loan, the past 12 to 24 months of credit history has more weight than the actual score.   Non conforming loans usually have a higher interest rate and can sometimes have penalties attached.  Make sure you are informed on these types of loans if this is the type of loan required.

Foreclosures and the process/benefits

Foreclosed homes are a great way to get instant equity in a house.  A foreclosed house is a home that has been repossessed by the bank due to non payment. 

 In most cases you can get these types of homes well below the appraised value because banks are willing to take manageable losses to keep from holding property and incurring further costs.  These properties are usually sold “as is” and an inspection is advisable. 

Using a member of the Ashton Real Estate Group realtors will be extremly beneficial as they will also negotiate closing costs to be paid by the bank helping you to minimize the amount of money needed to close. 

Unlike a regular listing, an offer on a foreclosure must be approved directly by the REO division of the bank that owns the property.  You will need to allow additional time to close.

Short sales and the process/benefits

A short sale is also another way to get a great price on a home.  A short sale is a bank accepted offer on a property that is about to be foreclosed on.  Like a foreclosure, the banks are a willing to take manageable losses on the property. 

The difference being, a short sale will keep the bank from the cost of legal action brought on by the foreclosure process.  A professional real estate agent must negotiate this deal but don’t let this scare you.  You might actually get a better deal on a short sale since some legal costs are cut. 

Once again, add additional time as the process works a little slower when dealing with a bank approving a loss.