Financing Your Purchase: What You Should Know About Mortgages...
If you are serious about buying, it is important to become pre-qualified or pre-approved for a mortgage as these documents give you leverage and allow for more negotiating power. You do not necessarily have to use the same mortgage broker to complete your buying process, but it is important to become pre-qualified or pre-approved before starting your home search so that you know how much you can afford and which properties are realistically within your price range.
Pre-qualification is a free estimate of how much money you can borrow. It is not an official agreement, however it does show commitment and the ability to get sufficient financing.
Pre-approval provides official documentation from the lender stating the amount of money that you are approved to borrow. It gives you significant negotiation leverage and accelerates the process of reaching an agreement. Pre-approval permits the lender to acquire your credit history and should only cost the price of the credit report.
Choose a Mortgage Broker
It is most important to start by finding an insightful, effective
mortgage representative who will cater to your needs and put you first.
Talk to your friends, family and co-workers about their experiences,
consider their recommendations. Also, take your time and speak directly
with a few mortgage brokers. Remember, you are in charge; you are
interviewing them for the job. Make sure that you are comfortable
and that you communicate easily with one another. TNM Realty works
closely with many of the area's best lenders and we are more than
happy to recommend the mortgage broker who we think is most compatible
with your needs.
What You'll Need
When you apply for a mortgage , you will generally
need to have the following documents on hand (although some mortgage
products may require some or none):
- Your bank statements (previous 2 months)
- Your most recent pay stubs (previous 2 months)
- Your W-2's (previous 2 years)
- Your federal tax returns (previous 2 years)
- Your debt information (credit cards, student loans, car loans, etc.)
Time Frame
Typically, the loan application process takes anywhere from 30-60 days, although it can range from one week to 90 days in some cases.
Creative Financing
There are many creative ways to finance your purchase and the particular
mortgage product that you choose will depend entirely on your financial
situation. It is important to choose a mortgage representative that
will advise the most suitable loan for you. For a list of mortgage
products currently available, please see the Terms
and Definitions section.
Paying the Mortgage
Usually, you will make your first mortgage payment 30 days after the closing, but the specific date will be outlined in your
closing documents. Your payment will include the principal and interest, and possibly the mortgage insurance and escrow.
- Principal — monthly repayment of the original amount that is borrowed. If you choose an “ interest-only” mortgage you will not pay down any principal.
- Interest — The monthly cost of borrowing the principal amount.
- Escrow — A fund from which the lender often pays your real estate taxes, home owners; insurance and mortgage insurance on your behalf.
Easy-to-use tools: check out the links below to learn more
Remember, every buying transaction is unique and different from the next. This is going to be a learning process. Browse through our Terms and Definitions section to familiarize yourself with some more key words associated with buying. AND, always ask any and all questions. Our friendly, knowledgeable agents are here to make your home buying experience a wonderful one.
617.527.6655 or buying@tnmrealty.com
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