| 1. |
What documentation will I need to provide to get my loan approved? Answer |
| 2. |
How do I know how much house I can afford? Answer |
| 3. |
How do I know which type of mortgage is best for me? Answer |
| 4. |
What is a FICO Score? Answer |
| 5. |
How can I raise my FICO Score? Answer |
| 6. |
What is the difference between pre-approved and pre-qualified? Answer |
| 7. |
What does a mortgage lender consider when reviewing a mortgage application? Answer |
| 8. |
What are closing costs and prepaids? Answer |
| 9. |
What does my mortgage payment include? Answer |
| 10. |
What is Mortgage Insurance? Answer |
| 11. |
What is an escrow account? Answer |
| 12. |
Is there a fee charged or any other obligation if I complete the application? Answer |
| 13. |
What is the difference between a fixed-rate loan and an adjustable-rate loan? Answer |
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What documentation will I need to provide to get my loan approved? |
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Different loan programs and your financial situation may require different documentation and Guardian's knowledgeable loan originators will guide you through this process. Because this is asked so often, Guardian has created a checklist to aid you in gathering your documents for your mortgage application. To print the List of commonly requested documents Click here |
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How do I know how much house I can afford? |
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Generally speaking, you can purchase a home with a value of two or three times your annual household income. However, the amount that you can borrow will also depend upon your employment history, credit history, current savings and debts, and the amount of down payment you are willing to make. You may also be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value.
It is advised that a borrower be pre-qualified prior to signing a contract. You can begin this process with a consultation with one of Guardian's experienced mortgage originators who will help you decide on the appropriate loan program and down payment preferences.
You may initiate the consultation using:
- Call one of our experienced mortgage loan originators at 561-712-9777
- Complete the PDF pre-qualification form, scan and email it to us. Click here
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How do I know which type of mortgage is best for me? |
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There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. Guardian Financial Network can help you evaluate your choices and help you make the most appropriate decision. |
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What is a FICO Score? |
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FICO Scores are the most widely used credit score in U.S. mortgage loan underwriting. This 3-digit number, ranging from 300 to 850, is calculated by a mathematical equation that evaluates many types of information on your credit report. Higher FICO scores represent lower credit risks, which typically equate to better loan terms. |
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How can I raise my FICO Score? |
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The best way to earn a high FICO Score is to pay all your bills on-time every month.
Things that count against your score are:
- Poor payment history (example: late payments, collections, bankruptcy, repossession, foreclosure)*;
- High balances on your credit cards (general guideline - no more than 5 credit cards with balances, and each card balance lower than 75% of limit),*
- Credit checked frequently (credit inquiries), and
- Newly opened loans that do not have a 12 month payment history
* The first two items on the list affect your score the most.
You can obtain a federally-mandated free credit report once per year from all three credit reporting agencies at AnnualCreditReport.com. These do not include a free credit score, but it’s inexpensive to get at the same time.
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What is the difference between pre-approved and pre-qualified? |
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When a homebuyer is pre-qualified, he or she has provided the lender with the basic information to determine which loan program the homebuyer may qualify for. Whereas, when a homebuyer is pre-approved, the lender has collected, verified and presented the information needed for underwriting and approval. |
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What does a mortgage lender consider when reviewing a mortgage application? |
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There are several factors that are reviewed during the mortgage approval process including:
Assets
Credit history
Employment history and income
Value of the home that you wish to purchase or refinance |
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What are closing costs and prepaids? |
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Some closing costs that are required in any purchase, even if not obtaining a mortgage; such as: state transfer taxes, recording fees, and settlement agent fees. Then there are fees that generally occur only when mortgage financing is involved. A few common fees when obtaining a mortgage are as follows: appraisal fee, credit report fee, flood certification, lender’s title policy, and lender origination fees.
Prepaids are items that a borrower would pay in advance; such as: homeowner’s insurance or prepaid interest to the lender.
These costs vary depending upon the type of mortgage, property location, and other factors. A Loan Estimate will be provided to each borrower at application detailing these estimated costs. |
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What does my mortgage payment include? |
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For most homeowners, the monthly mortgage payments include four components:
Principal: Repayment on the amount borrowed
Interest: Payment to the lender for the amount borrowed
1/12 of your annual Taxes
and 1/12 of annual homeowner's Insurance.
PITI is a common acronym for the four underlined components.
If your mortgage carries mortgage insurance, a portion of your mortgage payment will include this also. Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company. |
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What is Mortgage Insurance? |
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Mortgage insurance protects the lender against potential losses if the borrower defaults. Mortgage insurance allows the buyer to purchase a home with a lower down payment than otherwise would be required. The cost of mortgage insurance can be added to the loan amount or paid monthly or both. Mortgage insurance costs vary depending upon your down payment, type of loan you select and sometimes your FICO score.
- Private Mortgage Insurance (PMI) is required on a conventional loan generally when the Loan to Value (LTV) percentage exceeds 80%. The cost of PMI is typically added to the monthly mortgage payment.
- FHA mortgage has both an Upfront Mortgage Insurance Premium (MIP) and a monthly MIP. FHA MIP is charged on all FHA loans regardless of the LTV.
- VA Funding Fee is an upfront fee that is generally added to the loan amount. The Funding Fee varies depending upon the LTV, if the eligibility has previously been used, and if the veteran is receiving disability income from the VA.
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What is an escrow account? |
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An escrow account is a separate account that holds funds for the purpose of paying bills such as homeowner’s insurance, property taxes and mortgage insurance. The lender collects the funds to be deposited into the escrow account each month along with your monthly payment and then pays the bills for you when they come due. By taking the annual amounts charged for insurances and property taxes and divide them by 12, a payment is determined and is added to your monthly principal and interest payment. Spreading the cost of these expenses over 12 months makes it easier for you to budget those expenses and you won’t have to come up with additional cash when bills are due. For some loans, escrow accounts are required. |
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Is there a fee charged or any other obligation if I complete the application? |
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There is no obligation for completing an application. The only upfront charge is the appraisal and credit report fee which is collected at time of application. These fees will appear at closing as a credit on your closing disclosure. |
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What is the difference between a fixed-rate loan and an adjustable-rate loan? |
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With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us. |
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