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Mortgage Financing With A Personal Touch
Getting Your Mortgage
Martha Harvey - Senior Loan Officer, NMLS# 33096
About Martha
SENIOR LOAN OFFICER, NMLS#33096
• Started in the mortgage industry in 1989
• Helped thousands of borrowers
• ...
Getting Your Mortgage
You've found your dream home and your offer has
been accepted. Your next step is getting your
mortga...
Choosing The Best Loan
When you start to shop around for a loan program, it's important to take into consideration:
• Your...
Fixed-Rate vs. ARM Mortgages
Mortgage loans generally fall into one of two broad categories: fixed-rate and ARM
Fixed-rate...
Mortgage Term Options
Mortgage loans have varying terms. Most terms range from 15 to 30
years. There are also terms availa...
Down Payment Options
A down payment is your initial investment in your home. The larger your down payment, the more
equity...
The Mortgage Loan Process
Asset verifications. Credit reports. Insurance applications.
Many homebuyers may wonder where th...
Application
You’ve decided upon a loan program, and now you’re ready to complete a loan
application with the help of your ...
Opening The File
Your lender orders the following documents and then awaits
their return:
 Property appraisal
 Credit re...
Underwriting
Your lender creates a loan file with all required information and passes
that file on to an underwriter.
The ...
Prior to Closing
Once the loan is approved:
1. Title insurance is ordered
2. Approval contingencies are met
3. The closing...
Insuring Your Home
Typically, homeowner's policies cover you for damages or losses caused by things like theft,
fire, vand...
Closing
Now that you obtained your homeowner's insurance, your
closing can be scheduled. Because your property is the
secu...
Getting Your Mortgage Tips
Your rights as a homebuyer
• According to the Fair Housing Act, no lender may charge excessive ...
Your Dedicated Mortgage Professional . . .
© 2015 Mortgage Network, Inc. NMLS ID# 2668 All rights reserved. Trade/servicem...
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Martha Harve Presentation #2 Getting Your Mortgage

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You've found your dream home and your offer has been accepted. Your next step is getting your mortgage. In this section, we're going to cover what it takes to get to the point where you sign your name on the dotted line:

•What to consider when choosing a mortgage
•The mortgage process

Follow along with the video at https://vimeo.com/marthaharvey/videos

Published in: Economy & Finance
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Martha Harve Presentation #2 Getting Your Mortgage

  1. 1. Mortgage Financing With A Personal Touch Getting Your Mortgage Martha Harvey - Senior Loan Officer, NMLS# 33096
  2. 2. About Martha SENIOR LOAN OFFICER, NMLS#33096 • Started in the mortgage industry in 1989 • Helped thousands of borrowers • Over $1 Billion in loan volume • Licensed in Massachusetts and New Hampshire • My favorite customers are first time homebuyers and the ability to walk them through the entire home buying process • Tougher Loans and finding a home loan for everyone is my niche • I started in the industry as a processor, underwriter. I know the process from the beginning to the end which gives me a unique take on getting the job done.
  3. 3. Getting Your Mortgage You've found your dream home and your offer has been accepted. Your next step is getting your mortgage. In this section, we're going to cover what it takes to get to the point where you sign your name on the dotted line: • What to consider when choosing a mortgage • The mortgage process
  4. 4. Choosing The Best Loan When you start to shop around for a loan program, it's important to take into consideration: • Your payment's stability, • Your ability to qualify for the loan amount, • How long you plan to live in the home, • Whether your income is stable or rising, • The possibility of significant interest rate changes, • The amount of up-front costs, and Your monthly mortgage payment will generally include: • A principal and interest payment, • An amount to cover your real estate taxes and homeowners insurance, and • Possibly an amount to cover other costs like condo fees and mortgage insurance. When you are ready to apply for a loan, your lender will review the loan options that are available and will help you determine the type that best suits your needs, including: • Fixed-rate versus ARM Loans • Mortgage term options • Down payment options
  5. 5. Fixed-Rate vs. ARM Mortgages Mortgage loans generally fall into one of two broad categories: fixed-rate and ARM Fixed-rate mortgages feature a non-changing interest rate. With a fixed-rate loan, the principal and interest portion of your monthly mortgage payment do not change; however, real estate taxes and homeowners insurance costs may rise from year to year, resulting in a higher monthly payment. Advantages and disadvantages: Fixed-rate mortgages are beneficial for you if your income is not rising rapidly, and you want the comfort of knowing the principal and interest portion of your mortgage payment will not change. The downside of fixed-rate mortgages is that they typically have a higher initial interest rate than ARM mortgages. ARM mortgages mean you assume some of the interest-rate risk that the lender normally assumes on a fixed-rate mortgage. For taking this risk, you would usually receive a lower initial interest rate than the fixed-rate mortgage's interest rate. Advantages and disadvantages: A lower interest rate means a lower monthly payment. The trade-off with the ARM mortgage is that, beyond increasing costs for taxes and homeowners insurance, the interest portion of your monthly payment also increases. The point at which the payment can be changed varies by the program you choose. It can range from one month to more than five years. Typically, the shorter the period before a change can occur, the lower the initial interest rate. ARM mortgages are designed for borrowers who are comfortable with their ability to handle payment increases.
  6. 6. Mortgage Term Options Mortgage loans have varying terms. Most terms range from 15 to 30 years. There are also terms available that are less than 15 years and more than 30 years. The term of your loan affects two things: • The monthly payment • The building of equity Equity is a term used to describe the difference between the market value of your property and the loan amount. The shorter the loan's term, the higher the monthly payment and the quicker you build equity. Conversely, a longer term results in lower monthly payments, but slower equity build-up.
  7. 7. Down Payment Options A down payment is your initial investment in your home. The larger your down payment, the more equity you have in your home from the start and the smaller your monthly payment. If you opt to make a down payment of less than 20% of your home’s value, your lender will most likely require that your loan is guaranteed by one of these entities: • US Department of Veterans Affairs (VA): If you are a veteran of the US armed forces, check with your lender regarding VA loan possibilities. • Federal Housing Administration (FHA): There are certain limitations with FHA loans; check with your lender regarding these options. • Private Mortgage Insurance (PMI): PMI offers several advantages over FHA financing. If your credit score is 720 or higher, you’ll typically pay less for and have greater flexibility with private MI than FHA mortgage insurance. With private MI:  You’ll avoid paying the upfront premium charged by FHA — an additional 1.75% of your loan amount.  Your monthly payment will be lower than or comparable to an FHA monthly payment.  You’ll have greater equity in your new home instead of a larger loan amount (most borrowers usually add the FHA upfront premium to their loan amount to keep closing costs down).  You can cancel coverage generally when your mortgage balance reaches 78% of your home’s value — either because you’ve paid down the balance or because your home’s appraised value has increased due to improvements or appreciation. • MassHousing or NH Housing loan options at 3% downpayment.
  8. 8. The Mortgage Loan Process Asset verifications. Credit reports. Insurance applications. Many homebuyers may wonder where the loan process begins — and where it ends. To help make the process easy to understand, we’ve laid out the basic steps involved in purchasing a home. The time frame will vary depending on geographic location, the loan, you and your lending institution. The complete mortgage loan process generally takes 20 to 30 days. However, it is not uncommon for the process to be shorter or longer.
  9. 9. Application You’ve decided upon a loan program, and now you’re ready to complete a loan application with the help of your lender. The Mortgage Loan Application Checklist can assist in making the process quick and easy. This checklist details the documents and information commonly required. Gather the items and information listed before you visit your lender to apply for your loan. If you have already met with a lender to prequalify for financing, you may have given them some of this information. Even so, bring the documents with you again when you go back to apply for your mortgage. Once you have completed the loan application, the lender will verify, or confirm, all of the information you provide. Based on the requirements of your loan program, the lender may ask you for additional information. Shortly thereafter, you will receive these documents from your lender:  Good Faith Estimate  Truth-in-Lending Disclosure  Commitment Letter
  10. 10. Opening The File Your lender orders the following documents and then awaits their return:  Property appraisal  Credit report Waiting for the appraisal may be the longest part of this process, depending upon the type of appraisal required and the appraiser's schedule.
  11. 11. Underwriting Your lender creates a loan file with all required information and passes that file on to an underwriter. The underwriter makes sure all loan requirements are met. Sometimes an underwriter needs additional information to make a decision. Two typical scenarios your lender might present to you are:  Information is needed before the loan is approved; it is critical that you provide the additional information as quickly as possible in this situation.  The underwriter approves the loan "with conditions;" that means you will need to provide additional information before the loan can be cleared to close.
  12. 12. Prior to Closing Once the loan is approved: 1. Title insurance is ordered 2. Approval contingencies are met 3. The closing is scheduled
  13. 13. Insuring Your Home Typically, homeowner's policies cover you for damages or losses caused by things like theft, fire, vandalism or wind. But if you also want to be covered for other disasters, such as floods or earthquakes, you may have to purchase extended coverage. Keep in mind, that your homeowner's insurance does not cover normal wear and tear. This is considered general maintenance and is something that you must save for in your budget. • Replacement coverage. Another consideration when you buy homeowner's insurance is whether you want replacement coverage for your home and its contents. This may cost more, but if you have a loss, you will be paid enough to replace whatever is damaged or destroyed. Without replacement coverage, the insurance company will take into consideration the age and condition of the damaged property and pay you only its fair market value. This means that, if your five-year-old television set is stolen, the insurance company will pay you its depreciated value — not what it would cost you to buy a new television set to replace it. • Liability insurance. Your homeowner's policy also provides another important type of protection called liability insurance. This means, if someone is injured on your property, you could file a claim under your homeowner's policy to cover medical and related expenses. When you purchase homeowner's insurance, you can choose the amount of liability coverage you need, much the same as you do with your auto insurance.
  14. 14. Closing Now that you obtained your homeowner's insurance, your closing can be scheduled. Because your property is the security for your mortgage loan, your lender wants to be sure the value of the home is protected in case it is damaged or destroyed. Contact your insurance agent to secure an insurance binder. At the closing, the borrower obtains his or her loan proceeds and presents a certified check to cover the balance of the down payment and the closing costs. The loan closes. The borrower moves into the new home.
  15. 15. Getting Your Mortgage Tips Your rights as a homebuyer • According to the Fair Housing Act, no lender may charge excessive fees or refuse to make a mortgage loan based on your race, national origin or ethnicity, or religious background. • Predatory mortgage lending, the practice of knowingly lending more money than a borrower can afford to repay, strips borrowers of home equity and destroys the benefits of homeownership. Choosing the best loan • The types of mortgages include fixed-rate and adjustable-rate and 15-year and 30-year. • An advantage of a fixed-rate mortgage is that the monthly principal and interest payment are predictable and unchanging throughout the life of the loan. • Nonfixed-rate mortgages are designed for borrowers who are able to handle payment increases down the road. • If your mortgage loan allows for negative amortization, it's possible that you would eventually owe more on the house than the amount of the original loan. • In order to choose the most appropriate loan for your needs, you need to consider the possibility of significant rate increases, the amount of time you intend to live in the house and whether your income is stable or fluctuating. The mortgage process • Points are a one-time fee from the lender that cover its cost of doing business. One point equals 1% of the loan amount. • A Good Faith Estimate could include the amount you will pay in points on your loan, estimated charges for title insurance and an estimate of closing costs. • The APR is typically higher than the interest rate because the APR includes points, interest, and other finance charges. • A lender may require the following documents to review your income: W-2s covering the most recent two tax years; most recent year-to-date pay stub; and bank statements. • Benefits of mortgage insurance include that it allows a buyer to purchase a home with little or no money down; it financially protects the lender making it possible for them to do more low-down-payment loans; and it allows the buyer to purchase a home sooner and build equity faster. You should know and understand the following points covered within the Getting Your Mortgage section:
  16. 16. Your Dedicated Mortgage Professional . . . © 2015 Mortgage Network, Inc. NMLS ID# 2668 All rights reserved. Trade/servicemarks are the property of Mortgage Network, Inc. 300 Rosewood Drive, Danvers, MA 01923. Also doing business as MNET Mortgage Corp. Connecticut 3785; Licensed by the Department of Corporations under the California Residential Mortgage Act Finance Lenders Law License 603B322; Delaware 010168; Florida Mortgage Lender Servicer MLD170; District of Columbia Mortgage Dual Authority License MLB2668; Georgia Residential Mortgage Licensee 15441; Illinois Residential Mortgage Licensee MB.0006470; Indiana-DFI First Lien Mortgage Lending License 16783; Indiana-DFI Subordinate Lien Mortgage Lending License 16784; Maryland Mortgage Lender License No. 19266; Massachusetts Mortgage Lender and Broker MC2668; Massachusetts Third Party Loan Servicer Registration LS2668; Maine SLM2499; Minnesota Residential Mortgage Originator License Other Trade Name #1 MN-MO-20261162; Licensed by the New Hampshire Banking Department 5573-MB; 300 Rosewood Drive, Danvers, MA 01923 – Location authorized to conduct New York regulated mortgage activities, MNET Mortgage in lieu of Mortgage Network, Inc. in New York - Registered Mortgage Broker – NY State Banking Department RMB 207997; Licensed by the NJ Department of Banking and Insurance-New Jersey Residential Mortgage Lender License 0755551; North Carolina L-113607; Ohio Mortgage Broker Act Mortgage Banker Exemption MBMB.850051.000; Licensed by the Pennsylvania Department of Banking 21978. Rhode Island Licensed Lender 95000456LL; South Carolina-BFI Mortgage Lender / Servicer License MLS – 2668; Texas Reg. 43205; Texas Regulated Loan License 10569-46959; Licensed by the Virginia State Corporation Commission MC-2593. Some products may not be available in all states. This is not Martha Harvey Senior Loan Officer NMLS #33096 Office: 978-399-1303 mharvey@mortgagenetwork.com Start the loan process www.MarthaHarveyMortgage.com Mortgage Network, Inc. 239 Littleton Road Westford, MA 01886

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