Welcome to HomeFree-USA Financial FAQ Knowledge Base. Type in your question or search keywords that correspond to your issue.
For example: Should I have a home inspection?
Most mortgages can be paid off early, and that information is found in your mortgage Note.
Absolutely. A real estate transaction is complex, and education is helpful to getting the best deal. Many of the services earn their living off of commissions so it's critical to know as much as you can.
First, devise a checklist for the information from each lending institution. You should include the company's name and basic information, the type of mortgage, minimum down payment required, interest rate and points, closing costs, loan processing time, and whether prepayment is allowed.
Choose your lender carefully. Look for financial stability and a reputation for customer satisfaction. Be sure to choose a company that gives helpful advice and that makes you feel comfortable.
There are mortgage options now available that only require a down payment of 5% or less of the purchase price.
If you purchased the policy, it will last indefinitely as of the purchase date as long as you own the property. However, any liens placed on the property later will not be covered.
As a rule of thumb, most lenders ask for 30 to 45 days to receive approval from an underwriter for a loan.
That depends on a number of factors, including the cost of the house and the type of mortgage you get.
Paying $300 to $500 for a home inspection is considered a wise investment as the inspector could reveal costly required repairs or future maintenance problems with the home.
Using a real estate broker is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier.
There may be closing cost customary or unique to a certain locality, but closing cost are usually made up of the following:
|Attorney's or escrow fees (Yours and your lender's if applicable)|
|Property taxes (to cover tax period to date)|
|Interest (paid from date of closing to 30 days before first monthly payment)|
|Loan Origination fee (covers lenders administrative cost)|
|First premium of mortgage Insurance (if applicable)|
|Title Insurance (yours and lender's)|
|Loan discount points|
|First payment to escrow account for future real estate taxes and insurance|
|Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)|
|Any documentation preparation fees|
Discount points allow you to lower your interest rate. They are essentially prepaid interest with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point.
Most loans have 4 parts which are abbreviated to PITI and sometimes PITIA if there is an Association such as a condo association fee or a homeowner association fee. The parts are defined as:
Delivering thorough and detailed documents to your lender is critical to loan approval by the underwriter. A list documents include:
This is a loan that enables the homebuyer to finance both the purchase and rehabilitation of a home through a single mortgage.
It's an estimate that lists all fees paid before closing, all closing costs, and any escrow costs you will encounter when purchasing a home.
Earnest money is money put down to demonstrate your seriousness about buying a home. It is also known as a good faith deposit.
Mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages. It's required primarily for borrowers making a down payment of less than 20%.
PMI stands for Private Mortgage Insurance or Insurer. These are privately-owned companies that provide mortgage insurance.
They are quite different.
Title insurance is for your and your lender's protection. The policy insures against any defect in the title, old liens, unpaid property taxes, easements or claims on the title.
Prequalification is an unverified estimate of what the lender thinks you can qualify for, many times after they have run a quick credit report. Preapproval is a result of submitted documentation from the client such as, paystubs, bank statements and tax returns in addition to reviewing the credit report.
An adjustable rate mortgage may make sense If you are confident that your income will increase steadily over the years or if you anticipate a move in the near future and aren't concerned about potential increases in interest rates.
A home is an investment. When you rent, you write your monthly check and that money is gone forever.
Yes. Lenders now offer several affordable mortgage options which can help first-time homebuyers overcome obstacles that made purchasing a home difficult in the past.
Real estate professionals suggest that none of the earnest money deposit is from borrowed funds as this amounts documents the buyer's intent and the ability to pay for the purchase.
Ask around. Ask Realtors, lenders and friends. Many counties and cities have 1st time homebuyer programs. An online resource is http://downpaymentresource.com/.
The FHA works to make homeownership a possibility for more Americans. With the FHA, you don't need perfect credit or a high-paying job to qualify for a loan.
The mortgage menu is very diverse, and exploring the loan options takes time. What is good for one borrower, is not the best for another. Housing counselors are a good source of information.
Many federal, state and local agencies administer programs to assist people who need help buying a home.
When you purchase a home, make sure to talk to your lender and Realtor about the possibility of seller's concessions. Simply put, these concessions are a set dollar amount or percentage of the purchase price that a seller agrees to contribute to you, the buyer, towards your closing costs which will lower the amount you need to close on the property.
You must have a down payment of at least 3% of the purchase price of the home. Most affordable loan programs offered by private lenders require between a 3%-5% down payment, with a minimum of 3% coming directly from the borrower's own funds.
Anyone who meets the credit requirements, can afford the mortgage payments and cash investment, and who plans to use the mortgaged property as a primary residence may apply for an FHA-insured loan.
Simple mistakes are easily corrected by writing to the reporting company, pointing out the error, and providing proof of the mistake. You can also request to have your own comments added to explain problems. For example, if you made a payment late due to illness, explain that for the record. Lenders are usually understanding about legitimate problems.
As a consumer you are entitled to 1 free credit report annually.
There are three major credit reporting companies: Equifax, Experian, and Trans Union. Obtaining your credit report is as easy as calling and requesting one.
According to NeighborWorks America, the breakdown is as follows:
1. Payment history - 35%
2. Amounts owed - 30%
3. Length of credit history - 15%
4. Types of credit - 10%
5. New credit - 10%
Housing counselors will typically advise a score of 620 or higher.
The statute of limitations varies from state to state, and may be different for various types of consumer debts.
The Vantage Score is a credit rating system developed by the top three credit agencies, Experian, Equifax and TransUnion.
1. Old derogatory accounts with balances owing
2. Public record items
3. Opening of new accounts
4. Significatnt balance increases
5. Customers do not pay as agreed, and this is reported
Yes, you can purchase a home 7 years after bankruptcy according to most lenders, but it's always best to call a few lenders to confirm as lending programs are always changing.
It varies but it can take as little as a week to longer than six months. Real estate laws are dictated by states.
There are 2 nationwide programs with zero down payments required.
If you think the layoffs will lead to financial hardship and could prevent you from paying your mortgage, consider whether you can make adjustments to your budget or tap into any savings accounts that would allow you to make your payments.
A Short Payoff is a situation in which your lender will accept an amount for your property that is less than the total owed.
These two ways of exiting a property vary greatly.
The foreclosure process varies by state. However, borrowers must receive some warning or notice before a foreclosure can occur.