A and N Mortgage’s Home Buying Packet

Aaron Gitler Neena Vlamis
CEO President
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

HOME
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 BUYING
PACKET
“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.

1945 N. Elston Ave.
Chicago, IL 60642
773.305.LOAN (5626)
www.AandNmortgage.com

HOME BUYING CHECKLIST THE EXTRAORDINARY MADE ORDINARY

A and N Mortgage Services exists to serve you, the home buyer. With dozens of
Buying your first home is exciting but all the details and deadlines can be quite overwhelming.
companies promising low rates and competitive pricing, what makes our
This A and N Mortgage Services, Inc. home buying packet and helpful checklist will ensure that the customers keep coming back to us? A and N Mortgage provides efficient loans,
process of buying your first home is stress-free.
the knowledge to find the right loan product and exceptional service. A and N
Schedule Closing With: Mortgage streamlines the loan process by keeping our clientʼs loans with us from
Home Inspections: application to funding. The result has built our reputation as the premier
Contact: Phone: originator of residential loans in the Chicagoland area.
____ Realtor _____________ ______________
Contact:" " Phone:
____ Borrower ____________ ______________
_______________ _________________ ____ Loan Officer ____________ ______________ Residential mortgages are about more than money. As an integral part of our
____ Attorney ____________ ______________ 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
Are Conditions Met?
goals.
(Need to be met five days before closing).
Paperwork:
_____ Conditions/Paperwork still needed
Set up Utilities:
We keep your financial needs in mind and notify each client if a better suited
(refer to loan application checklist ____ Phone
program becomes available even after their closing.
or loan approval, if approved.) ____ Electric
____ Cable
_____ Call insurance company for hazard/
____ Internet
fire/homeowners insurance.
____ Gas
_____ Lock the interest rate. ____ Water
The enclosed packet will help you to better understand the home buying process
Bring to Closing: and your financial needs.
____ Driver’s License
Provide:
____ Cashier’s/Certified Check made payable
_____ Insurance to you. A and N Mortgage promises to make your loan process smooth and stress-free.
With our in-house processing, document production, funding and closing
_____ Inspection Reports
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

HOME BUYING TIPS PAYMENT SHOCK
To avoid payment shock please fill in the following information so that you know how much
DONʼT CHANGE JOBS you can afford to pay monthly for your housing payment.

This can create complications for loan qualification. Underwriters will have to reverify
employment and gather additional paychecks to secure your financing.
CAR PAYMENT:

DONʼT SWITCH BANKS OR MOVE YOUR MONEY STUDENT LOAN:

Moving your money can cause complications in the verification process. New accounts HOUSEHOLD UTILITIES:
and large deposits in the last 6 months will have to be explained and can delay the closing
of your loan. CHILD SUPPORT:

SCHOOL TUITION:
PAYING OFF BILLS HEALTH CLUB MEMBERSHIP:
Your mortgage consultant will advise if it is necessary to pay off bills to help you qualify for
HOMEOWNERS INSURANCE:
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. GROCERIES:

CELL PHONE
:
DO NOT MAKE ANY MAJOR PURCHASES INTERNET SERVICE:
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 CABLE/SATELLITE DISH:
approved.
ENTERTAINMENT:

CREDIT CARD PAYMENT
:
FINANCING
OTHER EXPENSES:
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 This number added to your total
make sure that you are not taking on too much debt. (See Payment Shock) monthly mortgage payments (with
escrows, insurance, assessment) TOTAL:
should be lower than 50% of your
gross monthly income.

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

A D V A N TA G E S O F P R E - A P P R O V A L OUR PROGRAMS
Pre-approval gives you a head start on your home buying process.
BEST FOR BORROWERS WHO PROGRAM LOAN CHARACTERISTICS

Plan to live in property for 7 years or 10, 15 OR 30 YEAR Same rate and payment for duration
THE REALTOR ADVANTAGE: more and want total payment stability FIXED RATE of 10, 15 or 30 year terms

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 Plan to live in property for 3,5 or 7 Lower interest rate and monthly
3/1, 5/1, 7/1, 10/1 YEAR
create a stronger client relationship that will lead to a faster closing. years, want payment stability and can payment remain the same for 3, 5,
accept changes later ADJUSTABLE RATE or 7 years
OR
Starting the 4th, 6th or 8th year, the
THE BUYER ADVANTAGE: Plan to move with in 3,5 or 7 years and
rate will adjust per year
want loan to remain in place when
Pre-approval lets the buyer be in control during a bidding war by allowing buyers to figure change occurs
out their limits and budget. It cuts down buying time and also gets the mortgage Low monthly payment of interest for
Live in areas with high real estate INTEREST ONLY
paperwork out of the way so that buyers can focus on finding a home rather than securing 1, 3, 5 or 7 years only
appreciation
their financing.
OR At the end of the 5 or 7 years,
principal payment is added,
Plan to move or refinance in a few
years increasing the monthly payment
BORROWERʼS PRE-APPROVAL CHECKLIST: amount
OR
1st time buyer who wants more house
for their money
HOMEOWNER INSURANCE AGENT
Buyer who may need more relaxed
FHA (Fixed or Adjustable) Loan amounts may vary and types
credit guidelines and who may have
THE PREVIOUS TWO (2) YEARS’ COMPLETE TAX RETURNS less funds to invest of properties may be restricted per
Federal House Authority guidelines

THE PREVIOUS TWO (2) YEARS’ W-2 FORMS FHA mortgage insurance is
required.

TWO (2) MOST RECENT PAY STUBS Loan amounts may vary and types
Buyer who may need more relaxed
FHA 203K of properties may be restricted per
credit guidelines and who may have
less funds to invest in properties in Federal House Authority guidelines
COPY OF PURCHASE CONTRACT FOR NEW HOME need of repair
FHA mortgage insurance is
required.
THE PREVIOUS TWO (2) MONTHS BANK STATEMENTS
Ask your A and N Mortgage Consultant for other programs that may fit your home buying needs.
AND MOST RECENT ASSET VERIFICATION


THE LOAN PROCESS U N D E R S TA N D I N G Y O U R C R E D I T

WHAT’S IN YOUR SCORE? HOW TO IMPROVE YOUR SCORE
Credit scores are calculated from a lot of different It takes time to fix your score because there is
CALL A AND N MORTGAGE TO GET During this phase, we’ll pull your credit scores and credit data in your credit report. This data can be no quick fix. The best plan is to manage your
PRE-APPROVAL FOR YOUR LOAN: begin checking necessary documentation such as: grouped into the following five categories. credit responsibly over time.

10 %10 %15 % 30 % 35 %
When searching for a home, it is important that THE PREVIOUS TWO (2) YEARS’ COMPLETE TAX RETURNS PAYMENT HISTORY It is important to stay current and pay you bills on
you are pre-approved so that your broker and the Detailed account payment information time. Paying off a collection does not remove it
potential seller know that you are serious about THE PREVIOUS TWO (2) YEARS’ W-2 FORMS such as credit cards, retail accounts, from your credit report. If you are having trouble
purchasing. It enhances your bargaining position installment loans and mortgages. making payments, contact your creditors.
and helps you budget how much you can afford. TWO (2) MOST RECENT PAY STUBS

COPY OF PURCHASE CONTRACT FOR NEW HOME
AMOUNTS OWED Pay off your debt instead of moving it from one
THE PREVIOUS TWO (2) MONTHS BANK STATEMENTS This is made up of account balances, credit card to another , and keep balances low.
AND MOST RECENT ASSET VERIFICATION proportion of credit lines used and Don’t close unused credit cards as a short term
proportion of loan amounts still owing. strategy to raise your score or open a number
HOMEOWNER INSURACE AGENT of credit lines you don ’t need.
FIND YOUR DREAM HOME:
LENGTH OF CREDIT HISTORY Don’t open a lot of new accounts rapidly if you
The application process begins once you’ve An appraiser will determine the value of the prop- This details time since accounts opened, have been managing credit for a short time.
explored properties and found your new home. erty you wish to buy. A title will be ordered by the
. specific types of accounts and time since New accounts will lower your average account age
Your documentation will be submitted by your seller’s attorney to ensure that the property is clear account activity. and can look risky if you are a new credit user .
mortgage consultant to our in-house of liens and unpaid taxes.
underwriting team to process your loan.
NEW CREDIT Do your rate shopping for a given loan within a
The number of recently opened accounts, focused period of time. If you can make inquiries
credit inquiries, time since recent account casually, it will look as though you are searching
THE CLOSING: opening and re -establishment of positive for many credit lines rather than obtaining
credit history following past payment problems. research for one line.
The seller attorney will coordinate with your
’s A and N Mortgage will make sure that your loan is
attorney and mortgage consultant to schedule a ready when you are. Your closing will not be TYPES OF CREDIT Apply for and open new credit accounts only as
closing. The appropriate loan documents will be delayed by underwriting conditions or funding needed. Have credit cards but manage them
The number of various types of accounts
sent to the title company for you to sign. problems. responsibly, closing an account doesn’t make it
you have (credit cards, retail accounts,
installment loans, mortgage, consumer, go away.
finance, etc.).


EXPLANATION OF LENDER AND CLOSING FEES* P R O P E R T Y TA X PAY M E N T
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
LENDER taxes and have a cushion for tax increase.

APPLICATION: ADMINISTRATION: CLOSING 1st PAYMENT COOK COUNTY DEKALB, DUPAGE, KANE, KENDALL, LAKE, MCHENRY, WILL

An application is filled out at this time This fee allows the lender to carry the loan from March 8 months/ TI* 7 months
and a credit report is ordered. This closing until completion of sale to the investor. JANUARY
cost allows your mortgage consultant April Pay taxes/Collect 3 months* 8 months
to research and acquire the best rate FEBRUARY
and program for you. UNDERWRITING:
May Taxes due Mar.1 /Collect 4 month 9 months
This fee pays the underwriters for reviewing
MARCH
APPRAISAL : your documentation and approving your loan.
This is payment for the appraiser June 5 months 1 0 months/ TI*
who will assess the value of your TAX SERVICE: APRIL
home based on other similar properties This fee allows your lender to access your July 6 months P y taxes/ Collect 5 months**
a
in the neighborhood. property tax information and ensure that MAY
your taxes are paid up to date. August 7 months Taxes due June 1/Collect 6 months
PROCESSING: JUNE
This cost begins your loan process; September 8 months/ TI TI/ Collect 2 months**
your mortgage consultant begins to JULY
collect financial documents to be October 3 months/ Pay Taxes Pay taxes /Collect 3 months
submitted to underwriting such as W2’s, * These payments will be finalized in the “good faith” document
supplied by your lender The title and closing fees vary by title
. AUGUST
bank statements and proof of assets. company in which you are buying. November 10 months/TI* Pay taxes /Collect 3 months**
SEPTEMBER Taxes due Sept.1st
TITLE & CLOSING December Collect 5 months 4 months
CITY OF CHICAGO TRANSFER STAMPS: OCTOBER
TITLE INSURANCE: 7.50/1000 The buyer is responsible for $7.50
This fee pays for the title search on the January Collect 6 months 5 months
per thousand of sale price of property. For NOVEMBER
property, which insures ownership of the instance, a $300,000 sale price will require
property, examines current and past tax $2250 for city transfer stamps. February 7 months 6 months
payments and reveals any existing liens on the DECEMBER
property. For a purchase it is standard that the
seller's attorney orders this; which means that ATTORNEY:
Attorney fees do not typically exceed $650 on *If the payment is due within 30 days of closing, the title company must collect a Title Indemnity (TI)
the title fees cannot be confirmed until your
mortgage consultant receives an estimate. residential property. This fee can be paid to the which is 1 1/2 - 2 times your last tax payment. This insures that the title company will have enough
attorney directly or from proceeds of closing. money to pay your taxes in the event there is a tax increase.
CLOSING: **If the tax bill is already available and/or mailed by the county, the title company will collect the exact
This fee is for the title company to notarize * These payments will be finalized in the
“good faith” document supplied by your lender. amount of money due for your taxes and pay them directly to the county. Simultaneously, your lender
your loan papers at the closing table, file the
The title and closing fees vary by title company will collect escrow to begin saving for the next payment. If necessary, your mortgage consultant will
documents that need to be recorded, prepare
the closing statement which tells you the details in which you are closing. incorporate taxes into the loan amount so that no money is due out-of-pocket at closing.
of your transaction. 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.


I N C O M E TA X D E D U C T I O N S CLOSING CHECKLIST

Can I deduct the sum of my monthly How does my inheritance or gift
payments for the year on my income taxes? money used for the purchase of my
house factor into my income taxes? Make sure that you know how much Don’t forget your spouse!
You can only deduct the interest portion of your payment.
This includes interest paid on mortgages to buy, build or money to bring to your closing.
Money from inheritance or from a gift that goes Many people plan to sign their documents
substantially improve your first or second home. Money directly into a real estate transaction is not subject
paid to principal cannot be part of your deduction. on behalf of themselves and their co-owner.
to taxes. There is no financial gain for you as the You will need a cashiers or certified check for your This can only be done with a Power of Attorney
recipient (other than the purchase of your home, down payment, if funds need to close are less than document stating that the non-present owner
Who gets the deduction which is already acknowledged by the govern- $50,000. If more than $50,000 funds will need to be gives the signing borrower this privilege. Even
when we file separately? ment in your taxes when you sell your home). wired to the title company closing costs by the title if you are the only one on title, your spouse still
company. These errors include interest paid per day has to sign to exercise their homestead rights.
A taxpayer can deduct interest he or she pays on a mort- (which is determined by the day of the month on which
gage if the taxpayer is the legal or equitable owner of the How do I know if I’m eligible you close), title charges, and recording fees for
property. In the marital setting, ownership rights and tax for real estate tax deduction? documents such as your mortgage and deed. Make
treatment when filing separately can get complicated. both of these checks payable to yourself.
If a home is owned jointly, each spouse can deduct half If you pay real estate taxes on property you own, Bring key documents.
the interest payments. your real estate taxes are fully tax deductible,
whether they are imposed by state, county, city, Know where and when your If you are signing on behalf of another
What happens when I make my January township, or some other local government body . closing is taking place. borrower, you must bring a Power of Attorney
payment in late December? Which years As co-owners, you can deduct the amount paid in document identifying this arrangement. Y ou
half. If you pay taxes for someone else (such as should also collect the co -borrowers drivers
taxes gets this deduction? Write down the time and address of the title company
a relative) for property you do not own, you do license information and social security number
you are using along with their phone number just in
not get that deduction. for certain patriot act documents that require
If you make your January payment during the month of case you need to notify them if you are running late.
December it can be applied to the earlier year. However,
, this information.
your statement from your lender showing your total interest Am I able to deduct my transfer
paid for the year will not reflect this payment. You will stamp payment along with other
need to deduct your correct amount on your income tax
fees paid at my closing? Set aside extra time.
statement explaining why their calculation is incorrect. Bring Identification.
No. You are only allowed to deduct origination While A and N Mortgage streamlines the loan process
Can I deduct my homeowners Y must have at least one form of picture
ou
points and prepaid interest, not other lending, and is always on time, third parties may cause delays.
association assessment? title or transfer stamp costs. However, you are The title company or attorneys involved may cause the
identification such as a drivers license, state ID
able to deduct these amounts from your capital
or passport in order to close. Please make sure
closing to take longer than planned. Do not plan
No. This payment which includes insurance on the gain when you sell your property . that your identification has not expired.
anything, especially movers, too soon after your closing
building as well as general maintenance for common
unless you have an alternate person who can supervise
areas is not an income tax deduction.
your move.
* Please see your accountant for further details on
these questions (i.e., how to fill out an itemized
form).


MORTGAGE GLOSSARY MORTGAGE GLOSSARY

Adjustable Rate Mortgage (ARM) FHA 203K Loan Negative Amortization Quitclaim Deed
Mortgage loans under which the interest rate is A loan that enables homebuyers to finance both the Occurs when a borrower makes an minimum payment A deed that transfers without warranty whatever interest
periodically adjusted as agreed to at the inception of the purchase (or refinance) a home and the costs of that may not cover the interest that is due. Loan balance or title a grantor may have at the time the conveyance is
loan. rehabilitation. then increases as a result. made.

Amortization Fixed Mortgage Rate (FRM) Non-Conforming Rate Lock
The systematic and continuous payment of an obligation A mortgage where the interest rate does not change for A mortgage amount that exceeds that which is eligible for A commitment issued by a lender to a borrower or other
through installments until the debt has been paid in full. the life of the loan. purchase by FNMA or FHLMC. All loans above this mortgage originator guaranteeing a specified interest rate
amount are considered to be non-confirming or jumbo for a specified period of time at a specific cost.
Annual Percentage Rate (APR) Gift Letter loans.
The total yearly cost of a mortgage as expressed by the A letter of affidavit that indicates that part of a borrower’s Tenancy-in-Common
actual rate of interest paid. The APR includes the base down payment is supplied by relatives or friends in the Origination Process As opposed to joint tenancy, when there are two or more
interest rate, points, and any other add-on loan fees and form of a gift and that the gift does not have to be repaid. Process in which a lender solicits business, gathers individuals on title to a piece of property, this type of
costs. As a result, the APR is invariably higher for the rate required information and commits to loan money, for the ownership does not pass ownership to the others in the
of interest the lender quotes for the mortgage but gives a Joint Tenancy purchase of real estate. event of death.
more accurate picture of the likely cost of the loan. Keep
A form of ownership or taking title to property in which
in mind that most mortgages are not held for their full 15 Private Mortgage Insurance (PMI) Transfer Tax
each party owns the whole property and ownership is not
or 30 year terms, so the effective APR is higher then the separate. In the event of death of one party, the survivor Paid by a borrower to protect the lender in case of default. State or local tax payable when the title passes from one
quoted annual percentage rate because the points and
owns the property in its entirety. PMI is typically charged to the borrower when the loan-to- owner to another.
loan fees are spread out over fewer years. value ratio is greater than 80%.
Jumbo Loan Truth-in-Lending
Bridge Loan Pre-Approval
A loan greater than $_________________ or more in the A federal law that requires lenders to fully disclose, in
An equity loan secured to solve short-term financing
continental United States. These limits are set by the A term used to mean that a borrower has completed a writing, the terms and conditions or a mortgage, including
problems. federal National Mortgage Association and the Federal loan application and provided debt, income, and savings the annual percentage rate (APR) and other charges.
Home Loan Mortgage Corporation. Because jumbo loans information that has been reviewed and pre-approved by
Conforming Loan cannot be funded by these two agencies, they usually an underwriter. Underwriting
A loan for up to and including $_______________ in the carry a higher interest rate.
The process of evaluation a loan application to determine
continental United States (Alaska and Hawaii limits are Pre-Qualification the risk involved for the lender. It involves an analysis of
higher.) Loan Servicing After a loan officer has made inquires about a borrower’s the borrower's ability and willingness to repay the debt
The tasks a lender performs to protect a mortgage debt, income, and savings, he or she can write a written and the value of the property.
Debt-To-Income Ration (DTI) investment, including collecting monthly payments from statement about the borrower’s chances for qualifying for
The ratio or aggregate monthly debt to aggregate monthly borrowers and dealing with delinquencies. a home loan. VA Loan
income.
A low cost, fixed-rate loan offered to veterans and their
Loan-To Value (LTV) Ratio Qualifying Ratios spouses. In most cases these loans require little to no
FHA Loan The relationship between the dollar amount of a Calculations that are used in determining whether a down payment and are not available for investment
A loan that is insured by the Federal Housing Authority. borrower’s mortgage loan and the value of the property. borrower can qualify for a mortgage. There are two ratios. properties or manufactured housing.
This type of loan is geared toward providing moderate to The “top” or “front” ratio is a calculation of the borrower’s
low income families mortgages, and is subject to the monthly housing costs (principal, taxes, insurance,
qualifying guidelines set forth by the Federal Housing mortgage insurance, homeowners’ association fees) as a
Authority. percentage of monthly household income. The “back” or
“bottom” ratio includes housing costs as well as all other
monthly debt.


A and N Mortgage’s Home Buying Packet

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