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A and N Mortgage Services, Inc.
With 21 years of combined
industry experience, Neena Vlamis
and Aaron Gitler, president and
CEO respectively, joined forces in
2002 to form A and N Mortgage
Services, Inc. The two dog owners
decided to start their business
while hanging out on the dog
beach, and Gitlerʼs dog, Ralph, still
comes to the office every day. An
Illinois State Credit Union Service
Provider, A and N Mortgage
Services made the list of Top Ten
Most Dependable Mortgage
Brokers of Chicago in Chicago
Magazine in 2007. Creating a
tight-knit, family company, Vlamis
says her favorite part of her job is
“sitting down with a client and
getting to the root of their financial
fears and questions.” For right
now, Gitler and Vlamis are working
toward growing their relationships with Illinois State Credit Unions and the real estate
community. While they both still enjoy visiting the dog beach, Vlamis likes to spend
her free time with her husband, Dean of PERL Mortgage, and her two sons.
Aaron Gitler Neena Vlamis
CEO President
HOME
BUYING
PACKET
1945 N. Elston Ave.
Chicago, IL 60642
773.305.LOAN (5626)
www.AandNmortgage.com
A and N Mortgage Services exists to serve you, the home buyer. With dozens of
companies promising low rates and competitive pricing, what makes our
customers keep coming back to us? A and N Mortgage provides efficient loans,
the knowledge to find the right loan product and exceptional service. A and N
Mortgage streamlines the loan process by keeping our clientʼs loans with us from
application to funding. The result has built our reputation as the premier
originator of residential loans in the Chicagoland area.
Residential mortgages are about more than money. As an integral part of our
service, we take the time to learn about each of our clients, their families,
lifestyles and priorities. With this information, we develop a unique home
financing strategy that meets the client's specific circumstances and long term
goals.
We keep your financial needs in mind and notify each client if a better suited
program becomes available even after their closing.
The enclosed packet will help you to better understand the home buying process
and your financial needs.
A and N Mortgage promises to make your loan process smooth and stress-free.
With our in-house processing, document production, funding and closing
departments, we maintain full control over your loan from beginning to end.
We look forward to making your home buying and home owning experience a
success.
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
Buying your first home is exciting but all the details and deadlines can be quite overwhelming.
This A and N Mortgage Services, Inc. home buying packet and helpful checklist will ensure that the
process of buying your first home is stress-free.
Home Inspections:
Contact:" " Phone:
_______________ _________________
Paperwork:
_____ Conditions/Paperwork still needed
(refer to loan application checklist
or loan approval, if approved.)
_____ Call insurance company for hazard/
fire/homeowners insurance.
_____ Lock the interest rate.
Provide:
_____ Insurance
_____ Inspection Reports
T H E E X T R AO R D I N A R Y MADE ORDINARY
Schedule Closing With:
Contact: Phone:
____ Realtor _____________ ______________
____ Borrower ____________ ______________
____ Loan Officer ____________ ______________
____ Attorney ____________ ______________
Are Conditions Met?
(Need to be met five days before closing).
Set up Utilities:
____ Phone
____ Electric
____ Cable
____ Internet
____ Gas
____ Water
Bring to Closing:
____ Driver’s License
____ Cashier’s/Certified Check made payable
to you.
H O M E B U Y I N G C H E C K L I S T
DONʼT CHANGE JOBS
This can create complications for loan qualification. Underwriters will have to reverify
employment and gather additional paychecks to secure your financing.
DONʼT SWITCH BANKS OR MOVE YOUR MONEY
Moving your money can cause complications in the verification process. New accounts
and large deposits in the last 6 months will have to be explained and can delay the closing
of your loan.
PAYING OFF BILLS
Your mortgage consultant will advise if it is necessary to pay off bills to help you qualify for
a loan. They will also show you the best way to pay off bills and make sure you have
evidence of the bills being paid in full.
DO NOT MAKE ANY MAJOR PURCHASES
Donʼt buy that new car, furniture or sound system yet. A large payment can affect the
amount of home you qualify for and can make it more difficult for your loan to be
approved.
FINANCING
To help you find the right amount of financing, it is best to take a moment and calculate the
other expenses that will be part of your monthly responsibility. When applying for a loan,
your mortgage consultant will add these expenses to your proposed mortgage payment to
make sure that you are not taking on too much debt. (See Payment Shock)
To avoid payment shock please fill in the following information so that you know how much
you can afford to pay monthly for your housing payment.
H O M E B U Y I N G T I P S
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
P A Y M E N T S H O C K
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
TOTAL:
This number added to your total
monthly mortgage payments (with
escrows, insurance, assessment)
should be lower than 50% of your
gross monthly income.
CAR PAYMENT:
STUDENT LOAN:
HOUSEHOLD UTILITIES:
CHILD SUPPORT:
SCHOOL TUITION:
HEALTH CLUB MEMBERSHIP:
HOMEOWNERS INSURANCE:
GROCERIES:
CELL PHONE
:
INTERNET SERVICE:
CABLE/SATELLITE DISH:
ENTERTAINMENT:
CREDIT CARD PAYMENT
:
OTHER EXPENSES:
Pre-approval gives you a head start on your home buying process.
THE REALTOR ADVANTAGE:
When youʼre pre-approved, you are the first in the offer line, making you aware of your
buyerʼs intentions. Pre-approval will insure that the deal will close smoothly and helps
create a stronger client relationship that will lead to a faster closing.
THE BUYER ADVANTAGE:
Pre-approval lets the buyer be in control during a bidding war by allowing buyers to figure
out their limits and budget. It cuts down buying time and also gets the mortgage
paperwork out of the way so that buyers can focus on finding a home rather than securing
their financing.
BORROWERʼS PRE-APPROVAL CHECKLIST:
ADVANTAGES OF PRE -APPROVAL
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
OUR PROGRAMS
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
THE PREVIOUS TWO (2) YEARS’ COMPLETE TAX RETURNS
THE PREVIOUS TWO (2) YEARS’ W-2 FORMS
TWO (2) MOST RECENT PAY STUBS
COPY OF PURCHASE CONTRACT FOR NEW HOME
THE PREVIOUS TWO (2) MONTHS BANK STATEMENTS
AND MOST RECENT ASSET VERIFICATION
HOMEOWNER INSURANCE AGENT
BEST FOR BORROWERS WHO PROGRAM LOAN CHARACTERISTICS
Plan to live in property for 7 years or
more and want total payment stability
Plan to live in property for 3,5 or 7
years, want payment stability and can
accept changes later
Plan to move with in 3,5 or 7 years and
want loan to remain in place when
change occurs
Live in areas with high real estate
appreciation
Plan to move or refinance in a few
years
1st time buyer who wants more house
for their money
Buyer who may need more relaxed
credit guidelines and who may have
less funds to invest
Buyer who may need more relaxed
credit guidelines and who may have
less funds to invest in properties in
need of repair
10, 15 OR 30 YEAR
FIXED RATE
3/1, 5/1, 7/1, 10/1 YEAR
ADJUSTABLE RATE
INTEREST ONLY
FHA (Fixed or Adjustable)
FHA 203K
Same rate and payment for duration
of 10, 15 or 30 year terms
Lower interest rate and monthly
payment remain the same for 3, 5,
or 7 years
Starting the 4th, 6th or 8th year, the
rate will adjust per year
Low monthly payment of interest for
1, 3, 5 or 7 years only
At the end of the 5 or 7 years,
principal payment is added,
increasing the monthly payment
amount
Loan amounts may vary and types
of properties may be restricted per
Federal House Authority guidelines
FHA mortgage insurance is
required.
Loan amounts may vary and types
of properties may be restricted per
Federal House Authority guidelines
FHA mortgage insurance is
required.
OR
OR
OR
Ask your A and N Mortgage Consultant for other programs that may fit your home buying needs.
THE LOAN PROCESS
WHAT’S IN YOUR SCORE?
Credit scores are calculated from a lot of different
credit data in your credit report. This data can be
grouped into the following five categories.
HOW TO IMPROVE YOUR SCORE
It takes time to fix your score because there is
no quick fix. The best plan is to manage your
credit responsibly over time.
PAYMENT HISTORY
Detailed account payment information
such as credit cards, retail accounts,
installment loans and mortgages.
It is important to stay current and pay you bills on
time. Paying off a collection does not remove it
from your credit report. If you are having trouble
making payments, contact your creditors.
AMOUNTS OWED
This is made up of account balances,
proportion of credit lines used and
proportion of loan amounts still owing.
Pay off your debt instead of moving it from one
credit card to another , and keep balances low.
Don’t close unused credit cards as a short term
strategy to raise your score or open a number
of credit lines you don ’t need.
35
%
30
%
15
%
10
%
10
%
LENGTH OF CREDIT HISTORY
This details time since accounts opened,
specific types of accounts and time since
account activity.
Don’t open a lot of new accounts rapidly if you
have been managing credit for a short time.
New accounts will lower your average account age
and can look risky if you are a new credit user .
NEW CREDIT
The number of recently opened accounts,
credit inquiries, time since recent account
opening and re -establishment of positive
credit history following past payment problems.
Do your rate shopping for a given loan within a
focused period of time. If you can make inquiries
casually, it will look as though you are searching
for many credit lines rather than obtaining
research for one line.
TYPES OF CREDIT
The number of various types of accounts
you have (credit cards, retail accounts,
installment loans, mortgage, consumer,
finance, etc.).
Apply for and open new credit accounts only as
needed. Have credit cards but manage them
responsibly, closing an account doesn’t make it
go away.
UNDERSTANDING YOUR CREDIT
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
CALL A AND N MORTGAGE TO GET
PRE-APPROVAL FOR YOUR LOAN:
When searching for a home, it is important that
you are pre-approved so that your broker and the
potential seller know that you are serious about
purchasing. It enhances your bargaining position
and helps you budget how much you can afford.
FIND YOUR DREAM HOME:
The application process begins once you’ve
explored properties and found your new home.
Your documentation will be submitted by your
mortgage consultant to our in-house
underwriting team to process your loan.
THE CLOSING:
The seller
’s attorney will coordinate with your
attorney and mortgage consultant to schedule a
closing. The appropriate loan documents will be
sent to the title company for you to sign.
An appraiser will determine the value of the prop-
erty you wish to buy.
. A title will be ordered by the
seller’s attorney to ensure that the property is clear
of liens and unpaid taxes.
A and N Mortgage will make sure that your loan is
ready when you are. Your closing will not be
delayed by underwriting conditions or funding
problems.
During this phase, we’ll pull your credit scores and
begin checking necessary documentation such as:
THE PREVIOUS TWO (2) YEARS’ COMPLETE TAX RETURNS
THE PREVIOUS TWO (2) YEARS’ W-2 FORMS
TWO (2) MOST RECENT PAY STUBS
COPY OF PURCHASE CONTRACT FOR NEW HOME
THE PREVIOUS TWO (2) MONTHS BANK STATEMENTS
AND MOST RECENT ASSET VERIFICATION
HOMEOWNER INSURACE AGENT
Below is a quick guide for tax escrows. Each county has its own due date for taxes. At each due
date, your lender will require approximately 8 months of escrows (at your closing) in order to pay your
taxes and have a cushion for tax increase.
*If the payment is due within 30 days of closing, the title company must collect a Title Indemnity (TI)
which is 1 1/2 - 2 times your last tax payment. This insures that the title company will have enough
money to pay your taxes in the event there is a tax increase.
**If the tax bill is already available and/or mailed by the county, the title company will collect the exact
amount of money due for your taxes and pay them directly to the county. Simultaneously, your lender
will collect escrow to begin saving for the next payment. If necessary, your mortgage consultant will
incorporate taxes into the loan amount so that no money is due out-of-pocket at closing.
These numbers are estimates and will vary by lender, loan type and county.
Please ask your mortgage consultant for details on your specific closing date, county and loan
program.
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
E X P L A N A T I O N O F L E N D E R A N D C L O S I N G F E E S * PROPERTY TAX PAYMENT
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
* These payments will be finalized in the “good faith” document
supplied by your lender
. The title and closing fees vary by title
company in which you are buying.
LENDER
APPLICATION:
An application is filled out at this time
and a credit report is ordered. This
cost allows your mortgage consultant
to research and acquire the best rate
and program for you.
APPRAISAL
:
This is payment for the appraiser
who will assess the value of your
home based on other similar properties
in the neighborhood.
PROCESSING:
This cost begins your loan process;
your mortgage consultant begins to
collect financial documents to be
submitted to underwriting such as W2’s,
bank statements and proof of assets.
TITLE & CLOSING
TITLE INSURANCE:
This fee pays for the title search on the
property, which insures ownership of the
property, examines current and past tax
payments and reveals any existing liens on the
property. For a purchase it is standard that the
seller's attorney orders this; which means that
the title fees cannot be confirmed until your
mortgage consultant receives an estimate.
CLOSING:
This fee is for the title company to notarize
your loan papers at the closing table, file the
documents that need to be recorded, prepare
the closing statement which tells you the details
of your transaction.
ADMINISTRATION:
This fee allows the lender to carry the loan from
closing until completion of sale to the investor.
UNDERWRITING:
This fee pays the underwriters for reviewing
your documentation and approving your loan.
TAX SERVICE:
This fee allows your lender to access your
property tax information and ensure that
your taxes are paid up to date.
CITY OF CHICAGO TRANSFER STAMPS:
7.50/1000 The buyer is responsible for $7.50
per thousand of sale price of property. For
instance, a $300,000 sale price will require
$2250 for city transfer stamps.
ATTORNEY:
Attorney fees do not typically exceed $650 on
residential property. This fee can be paid to the
attorney directly or from proceeds of closing.
* These payments will be finalized in the
“good faith” document supplied by your lender.
The title and closing fees vary by title company
in which you are closing.
FEBRUARY
MARCH
APRIL
JUNE
JULY
SEPTEMBER
OCTOBER
DECEMBER
s
h
t
n
o
m
7
*
I
T
/
s
h
t
n
o
m
8
h
c
r
a
M
April Pay taxes/Collect 3 months* 8 months
May Taxes due Mar.1/Collect 4 month
*
I
T
/
s
h
t
n
o
m
0
1
s
h
t
n
o
m
5
e
n
u
J
*
*
s
h
t
n
o
m
5
t
c
e
l
l
o
C
/
s
e
x
a
t
y
a
P
s
h
t
n
o
m
6
y
l
u
J
August 7 months Taxes due June 1/Collect 6 months
September *
*
s
h
t
n
o
m
2
t
c
e
l
l
o
C
/
TI
s/ TI
h
t
n
o
m
8
October 3 months/ Pay Taxes Pay taxes /Collect 3 months
November 10 months/TI* Pay taxes /Collect 3 months**
December Collect 5 months 4 months
February 6 months
s
h
t
n
o
m
7
CLOSING COOK COUNTY DEKALB, DUPAGE, KANE, KENDALL, LAKE, MCHENRY, WILL
Taxes due Sept.1st
9 months
January Collect 6 months 5 months
1st PAYMENT
JANUARY
MAY
AUGUST
NOVEMBER
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com 1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
INCOME TAX DEDUCTIONS CLOSING CHECKLIST
Can I deduct the sum of my monthly
payments for the year on my income taxes?
You can only deduct the interest portion of your payment.
This includes interest paid on mortgages to buy, build or
substantially improve your first or second home. Money
paid to principal cannot be part of your deduction.
Who gets the deduction
when we file separately?
A taxpayer can deduct interest he or she pays on a mort-
gage if the taxpayer is the legal or equitable owner of the
property. In the marital setting, ownership rights and tax
treatment when filing separately can get complicated.
If a home is owned jointly, each spouse can deduct half
the interest payments.
What happens when I make my January
payment in late December? Which years
taxes gets this deduction?
If you make your January payment during the month of
December
, it can be applied to the earlier year. However,
your statement from your lender showing your total interest
paid for the year will not reflect this payment. You will
need to deduct your correct amount on your income tax
statement explaining why their calculation is incorrect.
Can I deduct my homeowners
association assessment?
No. This payment which includes insurance on the
building as well as general maintenance for common
areas is not an income tax deduction.
How does my inheritance or gift
money used for the purchase of my
house factor into my income taxes?
Money from inheritance or from a gift that goes
directly into a real estate transaction is not subject
to taxes. There is no financial gain for you as the
recipient (other than the purchase of your home,
which is already acknowledged by the govern-
ment in your taxes when you sell your home).
How do I know if I’m eligible
for real estate tax deduction?
If you pay real estate taxes on property you own,
your real estate taxes are fully tax deductible,
whether they are imposed by state, county, city,
township, or some other local government body
.
As co-owners, you can deduct the amount paid in
half. If you pay taxes for someone else (such as
a relative) for property you do not own, you do
not get that deduction.
Am I able to deduct my transfer
stamp payment along with other
fees paid at my closing?
No. You are only allowed to deduct origination
points and prepaid interest, not other lending,
title or transfer stamp costs. However, you are
able to deduct these amounts from your capital
gain when you sell your property
.
* Please see your accountant for further details on
these questions (i.e., how to fill out an itemized
form).
Make sure that you know how much
money to bring to your closing.
Know where and when your
closing is taking place.
Write down the time and address of the title company
you are using along with their phone number just in
case you need to notify them if you are running late.
Set aside extra time.
While A and N Mortgage streamlines the loan process
and is always on time, third parties may cause delays.
The title company or attorneys involved may cause the
closing to take longer than planned. Do not plan
anything, especially movers, too soon after your closing
unless you have an alternate person who can supervise
your move.
Don’t forget your spouse!
Many people plan to sign their documents
on behalf of themselves and their co-owner.
This can only be done with a Power of Attorney
document stating that the non-present owner
gives the signing borrower this privilege. Even
if you are the only one on title, your spouse still
has to sign to exercise their homestead rights.
Bring key documents.
If you are signing on behalf of another
borrower, you must bring a Power of Attorney
document identifying this arrangement. Y
ou
should also collect the co
-borrowers drivers
license information and social security number
for certain patriot act documents that require
this information.
Bring Identification.
Y
ou must have at least one form of picture
identification such as a drivers license, state ID
or passport in order to close. Please make sure
that your identification has not expired.
You will need a cashiers or certified check for your
down payment, if funds need to close are less than
$50,000. If more than $50,000 funds will need to be
wired to the title company closing costs by the title
company. These errors include interest paid per day
(which is determined by the day of the month on which
you close), title charges, and recording fees for
documents such as your mortgage and deed. Make
both of these checks payable to yourself.
1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com 1945 North Elston Ave.	 Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com
MORTGAGE GLOSSARY MORTGAGE GLOSSARY
Adjustable Rate Mortgage (ARM)
Mortgage loans under which the interest rate is
periodically adjusted as agreed to at the inception of the
loan.
Amortization
The systematic and continuous payment of an obligation
through installments until the debt has been paid in full.
Annual Percentage Rate (APR)
The total yearly cost of a mortgage as expressed by the
actual rate of interest paid. The APR includes the base
interest rate, points, and any other add-on loan fees and
costs. As a result, the APR is invariably higher for the rate
of interest the lender quotes for the mortgage but gives a
more accurate picture of the likely cost of the loan. Keep
in mind that most mortgages are not held for their full 15
or 30 year terms, so the effective APR is higher then the
quoted annual percentage rate because the points and
loan fees are spread out over fewer years.
Bridge Loan
An equity loan secured to solve short-term financing
problems.
Conforming Loan
A loan for up to and including $_______________ in the
continental United States (Alaska and Hawaii limits are
higher.)
Debt-To-Income Ration (DTI)
The ratio or aggregate monthly debt to aggregate monthly
income.
FHA Loan
A loan that is insured by the Federal Housing Authority.
This type of loan is geared toward providing moderate to
low income families mortgages, and is subject to the
qualifying guidelines set forth by the Federal Housing
Authority.
FHA 203K Loan
A loan that enables homebuyers to finance both the
purchase (or refinance) a home and the costs of
rehabilitation.
Fixed Mortgage Rate (FRM)
A mortgage where the interest rate does not change for
the life of the loan.
Gift Letter
A letter of affidavit that indicates that part of a borrower’s
down payment is supplied by relatives or friends in the
form of a gift and that the gift does not have to be repaid.
Joint Tenancy
A form of ownership or taking title to property in which
each party owns the whole property and ownership is not
separate. In the event of death of one party, the survivor
owns the property in its entirety.
Jumbo Loan
A loan greater than $_________________ or more in the
continental United States. These limits are set by the
federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation. Because jumbo loans
cannot be funded by these two agencies, they usually
carry a higher interest rate.
Loan Servicing
The tasks a lender performs to protect a mortgage
investment, including collecting monthly payments from
borrowers and dealing with delinquencies.
Loan-To Value (LTV) Ratio
The relationship between the dollar amount of a
borrower’s mortgage loan and the value of the property.
Negative Amortization
Occurs when a borrower makes an minimum payment
that may not cover the interest that is due. Loan balance
then increases as a result.
Non-Conforming
A mortgage amount that exceeds that which is eligible for
purchase by FNMA or FHLMC. All loans above this
amount are considered to be non-confirming or jumbo
loans.
Origination Process
Process in which a lender solicits business, gathers
required information and commits to loan money, for the
purchase of real estate.
Private Mortgage Insurance (PMI)
Paid by a borrower to protect the lender in case of default.
PMI is typically charged to the borrower when the loan-to-
value ratio is greater than 80%.
Pre-Approval
A term used to mean that a borrower has completed a
loan application and provided debt, income, and savings
information that has been reviewed and pre-approved by
an underwriter.
Pre-Qualification
After a loan officer has made inquires about a borrower’s
debt, income, and savings, he or she can write a written
statement about the borrower’s chances for qualifying for
a home loan.
Qualifying Ratios
Calculations that are used in determining whether a
borrower can qualify for a mortgage. There are two ratios.
The “top” or “front” ratio is a calculation of the borrower’s
monthly housing costs (principal, taxes, insurance,
mortgage insurance, homeowners’ association fees) as a
percentage of monthly household income. The “back” or
“bottom” ratio includes housing costs as well as all other
monthly debt.
Quitclaim Deed
A deed that transfers without warranty whatever interest
or title a grantor may have at the time the conveyance is
made.
Rate Lock
A commitment issued by a lender to a borrower or other
mortgage originator guaranteeing a specified interest rate
for a specified period of time at a specific cost.
Tenancy-in-Common
As opposed to joint tenancy, when there are two or more
individuals on title to a piece of property, this type of
ownership does not pass ownership to the others in the
event of death.
Transfer Tax
State or local tax payable when the title passes from one
owner to another.
Truth-in-Lending
A federal law that requires lenders to fully disclose, in
writing, the terms and conditions or a mortgage, including
the annual percentage rate (APR) and other charges.
Underwriting
The process of evaluation a loan application to determine
the risk involved for the lender. It involves an analysis of
the borrower's ability and willingness to repay the debt
and the value of the property.
VA Loan
A low cost, fixed-rate loan offered to veterans and their
spouses. In most cases these loans require little to no
down payment and are not available for investment
properties or manufactured housing.

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Home Buying Packet

  • 1. A and N Mortgage Services, Inc. With 21 years of combined industry experience, Neena Vlamis and Aaron Gitler, president and CEO respectively, joined forces in 2002 to form A and N Mortgage Services, Inc. The two dog owners decided to start their business while hanging out on the dog beach, and Gitlerʼs dog, Ralph, still comes to the office every day. An Illinois State Credit Union Service Provider, A and N Mortgage Services made the list of Top Ten Most Dependable Mortgage Brokers of Chicago in Chicago Magazine in 2007. Creating a tight-knit, family company, Vlamis says her favorite part of her job is “sitting down with a client and getting to the root of their financial fears and questions.” For right now, Gitler and Vlamis are working toward growing their relationships with Illinois State Credit Unions and the real estate community. While they both still enjoy visiting the dog beach, Vlamis likes to spend her free time with her husband, Dean of PERL Mortgage, and her two sons. Aaron Gitler Neena Vlamis CEO President HOME BUYING PACKET 1945 N. Elston Ave. Chicago, IL 60642 773.305.LOAN (5626) www.AandNmortgage.com
  • 2. A and N Mortgage Services exists to serve you, the home buyer. With dozens of companies promising low rates and competitive pricing, what makes our customers keep coming back to us? A and N Mortgage provides efficient loans, the knowledge to find the right loan product and exceptional service. A and N Mortgage streamlines the loan process by keeping our clientʼs loans with us from application to funding. The result has built our reputation as the premier originator of residential loans in the Chicagoland area. Residential mortgages are about more than money. As an integral part of our service, we take the time to learn about each of our clients, their families, lifestyles and priorities. With this information, we develop a unique home financing strategy that meets the client's specific circumstances and long term goals. We keep your financial needs in mind and notify each client if a better suited program becomes available even after their closing. The enclosed packet will help you to better understand the home buying process and your financial needs. A and N Mortgage promises to make your loan process smooth and stress-free. With our in-house processing, document production, funding and closing departments, we maintain full control over your loan from beginning to end. We look forward to making your home buying and home owning experience a success. 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com Buying your first home is exciting but all the details and deadlines can be quite overwhelming. This A and N Mortgage Services, Inc. home buying packet and helpful checklist will ensure that the process of buying your first home is stress-free. Home Inspections: Contact:" " Phone: _______________ _________________ Paperwork: _____ Conditions/Paperwork still needed (refer to loan application checklist or loan approval, if approved.) _____ Call insurance company for hazard/ fire/homeowners insurance. _____ Lock the interest rate. Provide: _____ Insurance _____ Inspection Reports T H E E X T R AO R D I N A R Y MADE ORDINARY Schedule Closing With: Contact: Phone: ____ Realtor _____________ ______________ ____ Borrower ____________ ______________ ____ Loan Officer ____________ ______________ ____ Attorney ____________ ______________ Are Conditions Met? (Need to be met five days before closing). Set up Utilities: ____ Phone ____ Electric ____ Cable ____ Internet ____ Gas ____ Water Bring to Closing: ____ Driver’s License ____ Cashier’s/Certified Check made payable to you. H O M E B U Y I N G C H E C K L I S T
  • 3. DONʼT CHANGE JOBS This can create complications for loan qualification. Underwriters will have to reverify employment and gather additional paychecks to secure your financing. DONʼT SWITCH BANKS OR MOVE YOUR MONEY Moving your money can cause complications in the verification process. New accounts and large deposits in the last 6 months will have to be explained and can delay the closing of your loan. PAYING OFF BILLS Your mortgage consultant will advise if it is necessary to pay off bills to help you qualify for a loan. They will also show you the best way to pay off bills and make sure you have evidence of the bills being paid in full. DO NOT MAKE ANY MAJOR PURCHASES Donʼt buy that new car, furniture or sound system yet. A large payment can affect the amount of home you qualify for and can make it more difficult for your loan to be approved. FINANCING To help you find the right amount of financing, it is best to take a moment and calculate the other expenses that will be part of your monthly responsibility. When applying for a loan, your mortgage consultant will add these expenses to your proposed mortgage payment to make sure that you are not taking on too much debt. (See Payment Shock) To avoid payment shock please fill in the following information so that you know how much you can afford to pay monthly for your housing payment. H O M E B U Y I N G T I P S 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com P A Y M E N T S H O C K 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com TOTAL: This number added to your total monthly mortgage payments (with escrows, insurance, assessment) should be lower than 50% of your gross monthly income. CAR PAYMENT: STUDENT LOAN: HOUSEHOLD UTILITIES: CHILD SUPPORT: SCHOOL TUITION: HEALTH CLUB MEMBERSHIP: HOMEOWNERS INSURANCE: GROCERIES: CELL PHONE : INTERNET SERVICE: CABLE/SATELLITE DISH: ENTERTAINMENT: CREDIT CARD PAYMENT : OTHER EXPENSES:
  • 4. Pre-approval gives you a head start on your home buying process. THE REALTOR ADVANTAGE: When youʼre pre-approved, you are the first in the offer line, making you aware of your buyerʼs intentions. Pre-approval will insure that the deal will close smoothly and helps create a stronger client relationship that will lead to a faster closing. THE BUYER ADVANTAGE: Pre-approval lets the buyer be in control during a bidding war by allowing buyers to figure out their limits and budget. It cuts down buying time and also gets the mortgage paperwork out of the way so that buyers can focus on finding a home rather than securing their financing. BORROWERʼS PRE-APPROVAL CHECKLIST: ADVANTAGES OF PRE -APPROVAL 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com OUR PROGRAMS 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com THE PREVIOUS TWO (2) YEARS’ COMPLETE TAX RETURNS THE PREVIOUS TWO (2) YEARS’ W-2 FORMS TWO (2) MOST RECENT PAY STUBS COPY OF PURCHASE CONTRACT FOR NEW HOME THE PREVIOUS TWO (2) MONTHS BANK STATEMENTS AND MOST RECENT ASSET VERIFICATION HOMEOWNER INSURANCE AGENT BEST FOR BORROWERS WHO PROGRAM LOAN CHARACTERISTICS Plan to live in property for 7 years or more and want total payment stability Plan to live in property for 3,5 or 7 years, want payment stability and can accept changes later Plan to move with in 3,5 or 7 years and want loan to remain in place when change occurs Live in areas with high real estate appreciation Plan to move or refinance in a few years 1st time buyer who wants more house for their money Buyer who may need more relaxed credit guidelines and who may have less funds to invest Buyer who may need more relaxed credit guidelines and who may have less funds to invest in properties in need of repair 10, 15 OR 30 YEAR FIXED RATE 3/1, 5/1, 7/1, 10/1 YEAR ADJUSTABLE RATE INTEREST ONLY FHA (Fixed or Adjustable) FHA 203K Same rate and payment for duration of 10, 15 or 30 year terms Lower interest rate and monthly payment remain the same for 3, 5, or 7 years Starting the 4th, 6th or 8th year, the rate will adjust per year Low monthly payment of interest for 1, 3, 5 or 7 years only At the end of the 5 or 7 years, principal payment is added, increasing the monthly payment amount Loan amounts may vary and types of properties may be restricted per Federal House Authority guidelines FHA mortgage insurance is required. Loan amounts may vary and types of properties may be restricted per Federal House Authority guidelines FHA mortgage insurance is required. OR OR OR Ask your A and N Mortgage Consultant for other programs that may fit your home buying needs.
  • 5. THE LOAN PROCESS WHAT’S IN YOUR SCORE? Credit scores are calculated from a lot of different credit data in your credit report. This data can be grouped into the following five categories. HOW TO IMPROVE YOUR SCORE It takes time to fix your score because there is no quick fix. The best plan is to manage your credit responsibly over time. PAYMENT HISTORY Detailed account payment information such as credit cards, retail accounts, installment loans and mortgages. It is important to stay current and pay you bills on time. Paying off a collection does not remove it from your credit report. If you are having trouble making payments, contact your creditors. AMOUNTS OWED This is made up of account balances, proportion of credit lines used and proportion of loan amounts still owing. Pay off your debt instead of moving it from one credit card to another , and keep balances low. Don’t close unused credit cards as a short term strategy to raise your score or open a number of credit lines you don ’t need. 35 % 30 % 15 % 10 % 10 % LENGTH OF CREDIT HISTORY This details time since accounts opened, specific types of accounts and time since account activity. Don’t open a lot of new accounts rapidly if you have been managing credit for a short time. New accounts will lower your average account age and can look risky if you are a new credit user . NEW CREDIT The number of recently opened accounts, credit inquiries, time since recent account opening and re -establishment of positive credit history following past payment problems. Do your rate shopping for a given loan within a focused period of time. If you can make inquiries casually, it will look as though you are searching for many credit lines rather than obtaining research for one line. TYPES OF CREDIT The number of various types of accounts you have (credit cards, retail accounts, installment loans, mortgage, consumer, finance, etc.). Apply for and open new credit accounts only as needed. Have credit cards but manage them responsibly, closing an account doesn’t make it go away. UNDERSTANDING YOUR CREDIT 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com CALL A AND N MORTGAGE TO GET PRE-APPROVAL FOR YOUR LOAN: When searching for a home, it is important that you are pre-approved so that your broker and the potential seller know that you are serious about purchasing. It enhances your bargaining position and helps you budget how much you can afford. FIND YOUR DREAM HOME: The application process begins once you’ve explored properties and found your new home. Your documentation will be submitted by your mortgage consultant to our in-house underwriting team to process your loan. THE CLOSING: The seller ’s attorney will coordinate with your attorney and mortgage consultant to schedule a closing. The appropriate loan documents will be sent to the title company for you to sign. An appraiser will determine the value of the prop- erty you wish to buy. . A title will be ordered by the seller’s attorney to ensure that the property is clear of liens and unpaid taxes. A and N Mortgage will make sure that your loan is ready when you are. Your closing will not be delayed by underwriting conditions or funding problems. During this phase, we’ll pull your credit scores and begin checking necessary documentation such as: THE PREVIOUS TWO (2) YEARS’ COMPLETE TAX RETURNS THE PREVIOUS TWO (2) YEARS’ W-2 FORMS TWO (2) MOST RECENT PAY STUBS COPY OF PURCHASE CONTRACT FOR NEW HOME THE PREVIOUS TWO (2) MONTHS BANK STATEMENTS AND MOST RECENT ASSET VERIFICATION HOMEOWNER INSURACE AGENT
  • 6. Below is a quick guide for tax escrows. Each county has its own due date for taxes. At each due date, your lender will require approximately 8 months of escrows (at your closing) in order to pay your taxes and have a cushion for tax increase. *If the payment is due within 30 days of closing, the title company must collect a Title Indemnity (TI) which is 1 1/2 - 2 times your last tax payment. This insures that the title company will have enough money to pay your taxes in the event there is a tax increase. **If the tax bill is already available and/or mailed by the county, the title company will collect the exact amount of money due for your taxes and pay them directly to the county. Simultaneously, your lender will collect escrow to begin saving for the next payment. If necessary, your mortgage consultant will incorporate taxes into the loan amount so that no money is due out-of-pocket at closing. These numbers are estimates and will vary by lender, loan type and county. Please ask your mortgage consultant for details on your specific closing date, county and loan program. 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com E X P L A N A T I O N O F L E N D E R A N D C L O S I N G F E E S * PROPERTY TAX PAYMENT 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com * These payments will be finalized in the “good faith” document supplied by your lender . The title and closing fees vary by title company in which you are buying. LENDER APPLICATION: An application is filled out at this time and a credit report is ordered. This cost allows your mortgage consultant to research and acquire the best rate and program for you. APPRAISAL : This is payment for the appraiser who will assess the value of your home based on other similar properties in the neighborhood. PROCESSING: This cost begins your loan process; your mortgage consultant begins to collect financial documents to be submitted to underwriting such as W2’s, bank statements and proof of assets. TITLE & CLOSING TITLE INSURANCE: This fee pays for the title search on the property, which insures ownership of the property, examines current and past tax payments and reveals any existing liens on the property. For a purchase it is standard that the seller's attorney orders this; which means that the title fees cannot be confirmed until your mortgage consultant receives an estimate. CLOSING: This fee is for the title company to notarize your loan papers at the closing table, file the documents that need to be recorded, prepare the closing statement which tells you the details of your transaction. ADMINISTRATION: This fee allows the lender to carry the loan from closing until completion of sale to the investor. UNDERWRITING: This fee pays the underwriters for reviewing your documentation and approving your loan. TAX SERVICE: This fee allows your lender to access your property tax information and ensure that your taxes are paid up to date. CITY OF CHICAGO TRANSFER STAMPS: 7.50/1000 The buyer is responsible for $7.50 per thousand of sale price of property. For instance, a $300,000 sale price will require $2250 for city transfer stamps. ATTORNEY: Attorney fees do not typically exceed $650 on residential property. This fee can be paid to the attorney directly or from proceeds of closing. * These payments will be finalized in the “good faith” document supplied by your lender. The title and closing fees vary by title company in which you are closing. FEBRUARY MARCH APRIL JUNE JULY SEPTEMBER OCTOBER DECEMBER s h t n o m 7 * I T / s h t n o m 8 h c r a M April Pay taxes/Collect 3 months* 8 months May Taxes due Mar.1/Collect 4 month * I T / s h t n o m 0 1 s h t n o m 5 e n u J * * s h t n o m 5 t c e l l o C / s e x a t y a P s h t n o m 6 y l u J August 7 months Taxes due June 1/Collect 6 months September * * s h t n o m 2 t c e l l o C / TI s/ TI h t n o m 8 October 3 months/ Pay Taxes Pay taxes /Collect 3 months November 10 months/TI* Pay taxes /Collect 3 months** December Collect 5 months 4 months February 6 months s h t n o m 7 CLOSING COOK COUNTY DEKALB, DUPAGE, KANE, KENDALL, LAKE, MCHENRY, WILL Taxes due Sept.1st 9 months January Collect 6 months 5 months 1st PAYMENT JANUARY MAY AUGUST NOVEMBER
  • 7. 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com INCOME TAX DEDUCTIONS CLOSING CHECKLIST Can I deduct the sum of my monthly payments for the year on my income taxes? You can only deduct the interest portion of your payment. This includes interest paid on mortgages to buy, build or substantially improve your first or second home. Money paid to principal cannot be part of your deduction. Who gets the deduction when we file separately? A taxpayer can deduct interest he or she pays on a mort- gage if the taxpayer is the legal or equitable owner of the property. In the marital setting, ownership rights and tax treatment when filing separately can get complicated. If a home is owned jointly, each spouse can deduct half the interest payments. What happens when I make my January payment in late December? Which years taxes gets this deduction? If you make your January payment during the month of December , it can be applied to the earlier year. However, your statement from your lender showing your total interest paid for the year will not reflect this payment. You will need to deduct your correct amount on your income tax statement explaining why their calculation is incorrect. Can I deduct my homeowners association assessment? No. This payment which includes insurance on the building as well as general maintenance for common areas is not an income tax deduction. How does my inheritance or gift money used for the purchase of my house factor into my income taxes? Money from inheritance or from a gift that goes directly into a real estate transaction is not subject to taxes. There is no financial gain for you as the recipient (other than the purchase of your home, which is already acknowledged by the govern- ment in your taxes when you sell your home). How do I know if I’m eligible for real estate tax deduction? If you pay real estate taxes on property you own, your real estate taxes are fully tax deductible, whether they are imposed by state, county, city, township, or some other local government body . As co-owners, you can deduct the amount paid in half. If you pay taxes for someone else (such as a relative) for property you do not own, you do not get that deduction. Am I able to deduct my transfer stamp payment along with other fees paid at my closing? No. You are only allowed to deduct origination points and prepaid interest, not other lending, title or transfer stamp costs. However, you are able to deduct these amounts from your capital gain when you sell your property . * Please see your accountant for further details on these questions (i.e., how to fill out an itemized form). Make sure that you know how much money to bring to your closing. Know where and when your closing is taking place. Write down the time and address of the title company you are using along with their phone number just in case you need to notify them if you are running late. Set aside extra time. While A and N Mortgage streamlines the loan process and is always on time, third parties may cause delays. The title company or attorneys involved may cause the closing to take longer than planned. Do not plan anything, especially movers, too soon after your closing unless you have an alternate person who can supervise your move. Don’t forget your spouse! Many people plan to sign their documents on behalf of themselves and their co-owner. This can only be done with a Power of Attorney document stating that the non-present owner gives the signing borrower this privilege. Even if you are the only one on title, your spouse still has to sign to exercise their homestead rights. Bring key documents. If you are signing on behalf of another borrower, you must bring a Power of Attorney document identifying this arrangement. Y ou should also collect the co -borrowers drivers license information and social security number for certain patriot act documents that require this information. Bring Identification. Y ou must have at least one form of picture identification such as a drivers license, state ID or passport in order to close. Please make sure that your identification has not expired. You will need a cashiers or certified check for your down payment, if funds need to close are less than $50,000. If more than $50,000 funds will need to be wired to the title company closing costs by the title company. These errors include interest paid per day (which is determined by the day of the month on which you close), title charges, and recording fees for documents such as your mortgage and deed. Make both of these checks payable to yourself.
  • 8. 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com 1945 North Elston Ave. Chicago, IL 60642 ph 773.305.LOAN (5626) fx 773.305.7000 www.AandNmortgage.com MORTGAGE GLOSSARY MORTGAGE GLOSSARY Adjustable Rate Mortgage (ARM) Mortgage loans under which the interest rate is periodically adjusted as agreed to at the inception of the loan. Amortization The systematic and continuous payment of an obligation through installments until the debt has been paid in full. Annual Percentage Rate (APR) The total yearly cost of a mortgage as expressed by the actual rate of interest paid. The APR includes the base interest rate, points, and any other add-on loan fees and costs. As a result, the APR is invariably higher for the rate of interest the lender quotes for the mortgage but gives a more accurate picture of the likely cost of the loan. Keep in mind that most mortgages are not held for their full 15 or 30 year terms, so the effective APR is higher then the quoted annual percentage rate because the points and loan fees are spread out over fewer years. Bridge Loan An equity loan secured to solve short-term financing problems. Conforming Loan A loan for up to and including $_______________ in the continental United States (Alaska and Hawaii limits are higher.) Debt-To-Income Ration (DTI) The ratio or aggregate monthly debt to aggregate monthly income. FHA Loan A loan that is insured by the Federal Housing Authority. This type of loan is geared toward providing moderate to low income families mortgages, and is subject to the qualifying guidelines set forth by the Federal Housing Authority. FHA 203K Loan A loan that enables homebuyers to finance both the purchase (or refinance) a home and the costs of rehabilitation. Fixed Mortgage Rate (FRM) A mortgage where the interest rate does not change for the life of the loan. Gift Letter A letter of affidavit that indicates that part of a borrower’s down payment is supplied by relatives or friends in the form of a gift and that the gift does not have to be repaid. Joint Tenancy A form of ownership or taking title to property in which each party owns the whole property and ownership is not separate. In the event of death of one party, the survivor owns the property in its entirety. Jumbo Loan A loan greater than $_________________ or more in the continental United States. These limits are set by the federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate. Loan Servicing The tasks a lender performs to protect a mortgage investment, including collecting monthly payments from borrowers and dealing with delinquencies. Loan-To Value (LTV) Ratio The relationship between the dollar amount of a borrower’s mortgage loan and the value of the property. Negative Amortization Occurs when a borrower makes an minimum payment that may not cover the interest that is due. Loan balance then increases as a result. Non-Conforming A mortgage amount that exceeds that which is eligible for purchase by FNMA or FHLMC. All loans above this amount are considered to be non-confirming or jumbo loans. Origination Process Process in which a lender solicits business, gathers required information and commits to loan money, for the purchase of real estate. Private Mortgage Insurance (PMI) Paid by a borrower to protect the lender in case of default. PMI is typically charged to the borrower when the loan-to- value ratio is greater than 80%. Pre-Approval A term used to mean that a borrower has completed a loan application and provided debt, income, and savings information that has been reviewed and pre-approved by an underwriter. Pre-Qualification After a loan officer has made inquires about a borrower’s debt, income, and savings, he or she can write a written statement about the borrower’s chances for qualifying for a home loan. Qualifying Ratios Calculations that are used in determining whether a borrower can qualify for a mortgage. There are two ratios. The “top” or “front” ratio is a calculation of the borrower’s monthly housing costs (principal, taxes, insurance, mortgage insurance, homeowners’ association fees) as a percentage of monthly household income. The “back” or “bottom” ratio includes housing costs as well as all other monthly debt. Quitclaim Deed A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made. Rate Lock A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost. Tenancy-in-Common As opposed to joint tenancy, when there are two or more individuals on title to a piece of property, this type of ownership does not pass ownership to the others in the event of death. Transfer Tax State or local tax payable when the title passes from one owner to another. Truth-in-Lending A federal law that requires lenders to fully disclose, in writing, the terms and conditions or a mortgage, including the annual percentage rate (APR) and other charges. Underwriting The process of evaluation a loan application to determine the risk involved for the lender. It involves an analysis of the borrower's ability and willingness to repay the debt and the value of the property. VA Loan A low cost, fixed-rate loan offered to veterans and their spouses. In most cases these loans require little to no down payment and are not available for investment properties or manufactured housing.