Mortgage Loan Answers
Frequently Asked Questions
Can I Ask You for Mortgage Loan Advice?
Absolutely and please do. Please ask me questions, and then ask me the same questions again. Ask ask ask. My goal is to ensure you understand the process of getting or refinancing a mortgage loan for your home and have realistic expectations of the process.
Am I Ready to Be a Homeowner?
I am an advocate of homeownership. Owning your own home gives you peace of mind in avoiding rent increases or your landlord deciding to sell. Buying a home is a big decision and could be the largest purchase you have ever made. It is important to start the process with a lender to ensure you know what you can afford, programs available, and create a solid plan to get you into your home.
Do I Need a Home Warranty?
First-time homeowners often have tight budgets after using most of their savings on the down payment. A good home warranty helps cover the cost in case major systems fail early in their homeownership, preventing the new homeowners from having to dip into their savings or borrow money for repairs.
Home warranties typically cover the repair or replacement of high-dollar systems like air-conditioning, which can cost anywhere from a few hundred dollars to fix or thousands of dollars to replace without a warranty.
Should I Refinance My Current Loan?
I can help you make a decision on whether or not it is a good time to refinance your current mortgage.
There are a lot of reasons homeowners consider refinancing their mortgage. Here are just a few to consider:
- You’re tired of the adjustable-rate that never seems to stop adjusting
- The Private Mortgage Insurance (PMI) is getting to be a bit much
- Time has come to save more money every month
- Mortgage rates are currently lower than your rate
What Is Pre-approval vs a pre-qualification?
Mortgage pre-qualification happens when a lender guesses how much of a home loan you can obtain. Important things to know about a mortgage pre-qualification include the following:
- The lender gives you an estimate based on your answers to a few questions
- The mortgage lender isn’t promising to provide you with a loan in the estimated amount
- You’ll still complete a home loan application and go through the approval process
Think of loan pre-qualification as the first chat with a lender. The mortgage loan specialist asks you a series of income-related questions to find a ball-park guess as to your loan eligibility. Keep in mind that the lender isn’t guaranteeing that you’ll qualify for the estimated loan amount.
Obtaining pre-approval vs. pre-qualification takes more effort on your part. Prepare to complete a significant amount of paperwork detailing all areas of your finances. The mortgage lender will ask you to show:
- Official identification (driver’s license, state-issued ID)
- Copy of your Social Security card
- Bank statements
- Proof of additional income (e.g., Pension, Child Support)
- Tax returns
- W-2 and 1099
All the above documents prove your income. However, a lender also wants to know about your debts. Your debt-to-income ratio is a crucial part of a lender’s decision on whether to grant you a pre-approval.
A financial institution also examines your credit score as part of your pre-approval application. There’s no denying that a high credit score will give you more profitable mortgage opportunities. However, there are plenty of home loans available for borrowers with less than flawless credit ratings.
A pre-approval letter makes it much easier to search for a new home. Indeed, possessing home loan pre-approval is practically essential in competitive housing markets.
Let Me Help Find You The Mortgage Loan That Is Right For You
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(Submitting an application does not pull your credit or affect your credit score.)