Magazine - Winter 2022


the mortgage process

Report all your income on your tax return, this will help you qualify for the best loans with low fees and rates. Your personal home and rental properties come with so many tax advantages, you will pay little to no taxes anyway. Don’t pay discount points to buy down your interest rate. That money is much better spent investing. Remember rates are at all-time low. When shopping for mortgages, ask about your lender's requirements. Lenders have different requirements for down payments, monthly payments and more. Make sure you understand all the requirements up front before starting the process. Ask your loan officer for a Loan Estimate. It will estimate your mortgage payment, closing costs, and how much cash to bring to closing. You can use this to compare other offers from different banks.

Step 1: Report all your income on your tax return. Step 2: Don’t pay discount points to buy down your interest rate. Step 3: Ask about your lender's requirements. Step 4: Ask your loan officer for a Loan Estimate. Step 5: No prepayment penalty, no balloon, and it is fixed rate mortgage. Step 6: Always compare the annual percentage rate (APR). Step 7: Pick a loan officer who is responsive and is a problem solver. Step 8: Prepare your paperwork. Step 9: Restructure any debt. Step 10: Organize your documents in a cloud storage like drop-box for easy access. Step 11: Make sure your funds are traceable. Step 12: Contact a Loan officer. Step 13: Find a house & get it under contract. Step 14: Close the deal & celebrate!!!

Make sure there is no prepayment penalty, no balloon, and the mortgage has a fixed rate.

When you're comparing loan estimates, always compare the annual percentage rate (APR) instead of the annual percentage yield (APY). APR takes into account not only the interest rate on your loan but also any fees charged by the lender. Pick a loan officer who is responsive and is a problem solver. If another lender has better terms, you can take your loan estimate and give it to the lender you prefer and have them match it. Prepare your paperwork. Your lender will need several documents in order to approve your application. At minimum, they'll want proof of your employment, tax returns, 3 months of bank statements, and proof of citizenship or residence. If you just started working, they’ll likely ask for your transcripts or degree, or ask for an employer verification. The lender will either ask for a letter from the HR department, or ask to speak to someone in HR. If you have student loans consolidated, restructure or refinance for the longest terms and best rates. Your goal is to keep your monthly payment low, not to pay the least amount of interest. Restructure any other debt you may have by using 0% balance transfer credit cards. Or go to your local credit union to get a personal loan to pay off high interest debt, or to refinance a high interest car loan. After you have restructured your debt for the lowest monthly payments, gather some initial documents. You’ll need your last 2 years of tax returns and pay stubs. For traditional owner occupant home loans, federal regulations require that all the money in your accounts be traceable. This means that any money you show in your accounts must be seasoned. Seasoned means money needs to have been in your bank account for a period of two - three months or longer, or that the funds came from a traceable source such as a gift from a person or entity. Contact a loan officer. Online providers like loandepot are great. They will need the above- mentioned documents, and to check your credit to calculate your debt to income ratio. With this information you will get a pre-approved loan amount for you to go house shopping. Once you find a house and get it under contract, you will go through the underwriting process where the bank will ask for the remainder of the documents. Once the lender has all of your information, a loan processor will prepare your file for underwriting. The processor's job is to make sure that the file is complete, accurate and complies with lending requirements. It may take a while to get through all the steps in the underwriting process, but don't be discouraged. When you've finished underwriting and gotten the clear to close from your mortgage officer, you'll be ready to buy your home and secure your financial future. Usually, our biggest concern is debt eating away at our wealth. Inflation on the other hand, is a silent killer that we can’t control but we can protect ourselves against it.

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