LINGO YOU’LL HEAR DURING THE LOAN PROCESS

If you are buying your first home, you will need to learn some of the jargon before you get started. Here are the most important terms you will need to know ahead of the loan process.

Appraisal

You will hear the word appraisal earlier in the process. An appraisal is a 3rd party estimation of the value of the property. The analysis will be highly accurate and take into consideration the comparable sales in your neighborhood. This will give the lender an understanding of the total value of the home they will be lending against.

Closing Costs

Closing costs will be the extra fees associated with your transaction that don’t include the property’s price. Closing costs typically include an origination fee, property taxes, charges for title insurance and escrow costs, appraisal fees, etc. These can vary depending on where the home is located and what vendors you use.

Credit Report

Your credit report will be ordered during the application process. This report is made up of a merged report between all 3 of the credit bureaus Transunion, Equifax, and Experian. It includes your entire credit history, including:

  • Payment history
  • Account age
  • Credit limit used
  • Derogatory remarks

Discount Point

Discount points are added fees paid at closing to decrease your overall interest rate. One point is equivalent to 1% of the loan amount. If you had a loan amount of $450,000, one discount point would cost you $4,500 at closing.

Escrow

Escrow is a 3rd party service that allows you to transfer funds safely during a real estate transaction based on a condition. All of the funds get deposited into the escrow account, and once the transaction is closed, the funds will be disbursed to the correct parties.

Interest

Interest is the fee that the lender will charge you for borrowing money. This is different than the origination fee because it is collected over the life of the loan.

Origination Fee

The origination fee is paid to the lender for the processing of your loan. This is usually stated in the form of points. One point is one percent of the total loan amount.

Principal

The principal is the loan’s unpaid balance and makes up one of the four parts of your monthly mortgage payment. As you pay your mortgage each month, the principal balance will decrease. Eventually, once your principal has been paid completely, you will own your home free and clear.

Recording

Recording is the final milestone of the loan process. This is when the registrar’s office has noted the deed, thereby making it a part of the public record.

It’s essential to use a lending team that is willing to educate you about the entire process. If you are ready to take the first steps, click here and speak with one of our expert mortgage loan officers. They will hold your hand throughout the entire experience and make sure you leave their office feeling ready to go.

For a more comprehensive list of mortgage terms, click here.

Your HomeReady

 

Segments of the potential mortgage market are completely ignored by some lenders. Not only is this a poor business choice, but ignoring certain populations can be seen as a discriminatory practice by regulators. At PRM, we want to serve all communities and bring the dream of home ownership within reach. Through Fannie Mae’s HomeReady program, we can help you to grow your business in underserved communities for credit-worthy clients with low to moderate income. With flexible income guidelines not seen in other conventional programs, HomeReady helps PRM to assist you in bridging the gap for clients who otherwise would have limited financial options. Segments of the potential mortgage market are completely ignored by some lenders. Not only is this a poor business choice, but ignoring certain populations can be seen as a discriminatory practice by regulators. At The Polder Group, we want to serve all communities and bring the dream of home ownership within reach. Through Fannie Mae’s HomeReady program, we can help you to grow your business in underserved communities for credit-worthy clients with low to moderate income. With flexible income guidelines not seen in other conventional programs, HomeReady helps The Polder Group to assist you in bridging the gap for clients who otherwise would have limited financial options.

 

HomeReady Flexible Income Guidelines

 

  • Rental income acceptable
  • Boarder income acceptable
  • Non-Occupant Co-Borrowers acceptable
  • Expanded eligibility for lower income families by potentially using income derived from occupants other than the borrower as a compensating factor
  • Flexible DTI requirements
  • HomeReady increased home affordability in other ways, with low down payment options, which can be less than the required amounts for FHA loans. Additionally, your client also doesn’t have to be a first-time homebuyer, and properties can be more than 1 unit.

 

In order to qualify for the HomeReady program, your client must meet income requirements for the area the subject property is located in.  For low-income census tracts, there are now income limitations. Income limitations by area can be viewed

Here.

https://www.fanniemae.com/singlefamily/homeready-income-eligibility-maps

 

 

If you have a client you think might benefit from the flexibility of the HomeReady Program, contact The Polder Group Today.

Tips for successful Homebuyers

The recent National Association of Realtors 2015 Profile of Home Buyers showed 95% of first-time home buyers and 86% of repeat buyers financed their home purchase. Clients in the market for a new home can increase their chances of a successful home buying transaction by following some of these tips.

Check Credit Reports

Credit reports can affect a client’s mortgage rate and ability to qualify for home financing. It’s important they review their credit report for any errors and take measures to boost their credit score if needed. Homebuyers can always check their credit report for free here.

Get Pre-Approved for a Mortgage

Before clients start a home search, always meet with a mortgage lender to get pre-approved. It will not only strengthen their offer, it helps clients understand their buying potential and helps real estate agents define the field of eligible properties that they can afford. Know the difference between a pre-approval and a pre-qualification!

Boost the Budget

Beyond helping clients create a budget for a home within their range, consider also looking for ways that could help reduce some of the costs. Seller or lender credits or grant funds can help offset closing costs or help with larger down payment funds, possibly expanding their search options.

Resale Value

The average person moves 11.3 times in their lives so it’s also important that clients consider the resale value when looking at homes. While a client may purchase their home as a long-term investment, keep in mind that they may one day need to sell it.

Buying a home is a major financial undertaking. Summit strives to educate clients and referral partners on all aspects of a home finance to help alleviate concerns and ensure a smooth home financing process. Contact us today!

Summit Staff Top 10 Places To Go In Tucson

Are you new to town? Do you want to find out where the locals hang out? We asked our staff here at Summit Funding about their hang out spots and we wanted to share the top 10.

  1. The Rialto (Great Shows!) Tucson brings some of the best and also unique artists to this venue. The best part is the size, which allows for a very intimate feel! The worst seat in the house is about 50 feet away. It is just fun, and a Tucson must! – Celina Stude, Loan Partner
  2. Cup Cafe at Hotel Congress is probably my most favorite place on the planet! It’s soooo good! Three words BLOODY MARY BAR! Every Sunday the Cup Café serves up the best breakfast This hotel is a big part of Tucson’s history.- Conner Sohns, Loan Officer
  3. Barrio Brewing Co. is what you would call a hidden gem. The building is next to a railroad and looks industrial, I really dig it!! I love checking out the UofA games and trying the new beers that they have on tap. – Dan Ford, Processor
  4. Rocks and Ropes is an indoor rock climbing gym. I went as a first time climber, and I had so much fun that I now go twice a year with friends. – Krystal Fountain, Loan Partner
  5. Prep and Pastry is hands down the best place to have brunch. The staff is on point, and always friendly. They sell out of space quickly but it is so worth it. Make sure you try the mimosas. – Ana Garcia, Business Development
  6. Maracana Indoor Sports Arena is the home of two amazing indoor soccer fields. You don’t have to be in a league, you can play in a “pick-up” game for only $5. – Derrick Polder, Senior Loan Officer
  7. Roadhouse Cinemas is the only movie theater in Tucson where I can have a Lazy boy style recliner, a cocktail and a bowl of nacho chips while I watch my favorite box office movies. -Kyle Taylor, Loan Officer
  8. Penca is the place to go if you want authentic Mexican food. I always order the carne asada tacos and the tortillas are always fresh, soft and obviously delicious. This place is authentic and a great date night. – Alex Pacheco, Loan Partner
  9. Reilly Craft Pizza & Drink is the bee’s knees! The pizza is amazing and they have three separate bars.  Bar number one is inside the restaurant. Bar number two is down in the basement and reminds me of a speak easy. Bar number three is the beer garden outside. – Padraic Macoby, Loan Partner
  10. R Bar is so trendy and the décor is modern. The bar is all  Red, hence the name. They have some very original cocktails and they play classic movies on the wall. I is a hidden location but a cool hang out. – Leticia Armenta, Greetings Partner