The earlier the better because sometimes borrowers need time to clear up credit report issues, pay down debts to improve qualifying ratios or save more money for a down payment. We frequently work with borrowers who are 6-12 months away from buying a home.
Generally, no. When your credit is pulled for a mortgage loan inquiry it is a "soft hit" unlike the application for an unsecured retail credit card which creates a "hard hit". These hits affect your credit score differently. Consumers are encouraged to shop around for the best terms they can find when buying a home.
When your information is submitted for a pre-approval it is reviewed by your personal loan originator and processor team at Community Mortgage Corp. We will calculate your qualifying ratios, review your income, debts and assets and determine which loan programs you are eligible for. Your scenario can then be run through automated underwriting to generate an approval letter and allow us to price your loan. Your information will never be transferred or sold without your knowledge and consent. There are no obligations to follow through with a loan by requesting a pre-approval and receiving information.
"Closing costs" is a generic term referring to a combination of fees, taxes, credits and escrows. Some items are paid by a seller and some are paid by the buyer as defined in a real estate purchase contract. Some of these items can be negotiated, some are prorated based on the day of the year we close or the purchase price, some are fixed and some are variable which you can shop for.
So there is no easy answer to the question but one way to estimate closing costs for a buyer is 1.5% of the purchase price. Meaning that on a $350,000 purchase there could be roughly $5250 in closing costs. Some areas have higher transfer taxes than others and every transaction is different so it can be higher or lower than that. However, buyers always receive credits to offset those costs, so that does not equal the amount of cash you bring to the closing table... which can often be $0!
Closing costs can be complicated but we have detailed forms and estimates that break it all down for you once you apply.
Types of closing costs:
Fees paid to service providers (such as: appraisers, inspectors, attorney, processors)
Property and transfer taxes (such as: property tax bills and city specific transfer taxes)
Title review and insurance (such as: Title, deed, survey and other legal doc review, owners policy)
Down payment and escrows (such as: prepaid taxes and insurance)
Every borrower can receive credits towards their closing costs. You have more control over your interest rate and fees than you may think. You will be given a variety of interest rates and associated fees so you can find the sweet spot that works for your goals, whether it's the lowest payment or the lowest fees. When purchasing a home there are a variety of credits available to you, some of which are automatic and some of which you negotiate with the seller but your lender can also chip in.
Because you will receive detailed quotes from many different lenders allowing you to compare your interest rates, APR, fees and terms. We will discuss your options and I will help you understand the choices you have. In exchange, I receive a flat fee from any lender we work with which is independent of the choices you make.
Not always. PMI (private mortgage insurance) is something you'll have to pay if you don't have 20% saved for a down payment. However, many lenders offer programs with LPMI options where the lender pays for this insurance on your behalf. Yes, they charge you a slightly higher interest rate but you hardly feel the difference in your monthly payment compared to the PMI payment. Sometimes, it actually makes sense to take the loan with PMI if for instance you know you will refinance the loan in the short term, plan to paydown the loan balance faster or you are remodeling and significantly increasing the value. PMI goes away once your loan reaches <80% of the value of the property.
Maybe, depending on exactly where you live there are many different types of down payment assistance available. Some are based on income caps, some are not, some are designated for first time home buyers, some are not, some of them are grants you pay back and some are not. We can help you identify any programs you may be eligible for. Gift funds can also be used from family and other approved sources.
There are loan programs available to borrowers with scores as low as 580 but for the most favorable terms and rates a score in the high 600s-low 700s is needed. Top tier credit scores are generally over 760. Your overall eligibility is based on a combination of things, credits score is extremely important but compensating factors can increase your odds of approval. We can help you identify your current approval level and if necessary make suggestions to help you increase your credit score and strengthen your application profile.
Usually as long as you are shopping for a home as long as you do not make any large purchases or open new credit during the meantime. We will advise you based on your scenario what to do and what not to do in order to maintain your approval status. A preapproval is a snapshot of your financial situation so we can always update and refresh your approval as needed.
With home values rising fast this is a popular question. If you are a homeowner who has built up a lot of equity that you wish to cash out for remodeling purposes or to pay for your kids wedding we have options. You don't even need a reason, use it to pay off cars, loans or travel the world. If you are over 62 and own your home outright we can talk about a Reverse Mortgage so you have steady income throughout your retirement.
From start to finish a loan can be approved and closed in as little as 2 weeks on a refinance with most purchase transactions averaging about 30 days.
If you are over 62 and own the home you live in you can explore reverse mortgage options to supplement your income. Click on the Reverse Mortgage tab above to learn much more.