Review some of the most frequently asked questions about the process of mortgage research in Annapolis, MD. Our team is ready to answer any question you have about the requirements involved with any mortgage. Review the information below, and if you have an additional question of any kind we are ready to help.
Q: How does credit affect my application for financing?
A: Credit is a critical pillar in the foundation of any loan application. Your credit and its compiling reflected as a score can impact the rate of interest, loan program availability, acceptable thresholds of qualifying information such as total allowable debt to income ratios, and much more.
Q: What factors go into making up my credit/qualifying FICO score?
A: While the specific algorithms are the proprietary information of the three credit bureaus there is a generally accepted breakdown of what is accounted for in the compiling of your score and how much weight it is given in that calculation. It breaks out to be:
- 35% Is Your Payment History
- 30% Is Your Amounts Owed
- 15% Is the Length of Your Credit History
- 10% Is Accounting for the Types of Credit You Obtain
- 10% Is for New Credit
Q: What is the loan approval process?
A: The loan process has many steps and steps within those steps but the general breakdown is as follows:
- Initial Inquiry
- Discussion of Proposed Loan Terms with Your Loan Officer
- Pre-Qualification Based on Supporting Documentation Provided
- Formal Loan Application with Loan Estimate and Corresponding Disclosures Sent out
- Submitted into Processing (Title Work, Appraisal, Tax Transcripts Ordered)
- Submitted to Underwriting
- Approved by Underwriting with Conditions
- Gather and Submit Remaining Conditions
- File Is Cleared for Closing with Final Approval
- Closing Disclosure Is Sent Out and Acknowledged
- Closing Takes Place
Q: How long is the typical loan transaction?
A: The average loan transaction may take anywhere from 30 to 60 days. This timeframe will obviously adjust based on the varying nature of the transaction and if anything changes the qualifying criteria during the approval process.
Q: Why should I buy?
A: There is any number of reasons to buy a home of your own; here are a few that are widely applicable to most people:
- Reduce Your Monthly Housing Expense (Often times It Can Be Less than What You Pay in Rent)
- The Interest You Pay on Your Mortgage Is a Big Tax Deduction
- If Needed, the Ability to Refinance on Your Home Is a Means of Financial Flexibility
- Putting down Roots in the Community That Build Long Term Stability
- Appreciation over Time Will Only Add to Your Equity Position Should You Sell or Use a Reverse
- Mortgage to Live on Your Hard Earned Equity in the Home You Love
- A Place to Call Your Own and the Freedom to Do with Your Home How You See Fit
Q: Why should I refinance?
A: There are any number of reasons to refinance your home loan, here are a few that are widely applicable to most people:
- Decrease Monthly Payments
- Get Cash from the Equity in Your Home
- Switch from an Adjustable to a Fixed Rate or Eliminate Other “Risky Features”
- Consolidate Debt
- Pay off Your Mortgage Sooner
- Removing a Person from Title
Q: What documents will I need for my loan application?
A: You will need:
- Personal Information
- Address and Telephone Numbers of Each Borrower
- Previous Addresses If You’ve Moved within the Past Two Years
- Social Security Numbers of All Applicants
- Name and Address of Landlord(S) or Lender(S) for the Past Two Years
- Current Housing Expense Details (Rent, Mortgage Payments, Property Taxes and Home Owners Insurance)
- Employment / Income:
- Name and Address of Employers for the Past Two Years
- Pay Stubs for the Past 30 Days
- W-2 Forms for the Past Two Years
- If you are self-employed:
- Complete Signed Federal Tax Returns for the Past Two Years
- Year to Date Profit and Loss Statement and Balance Sheet Possibility of Using Bank Statements or Stating Your Income
- Business License
- Other Income
- If you receive Social Security, a pension, rental income, disability or VA benefits you’ll need:
- A Copy of Your Awards Letter (or Tax Returns for the Past Two Years)
- A Copy of Your Most Recent Checks
- Document Receipt of Rental Income (Bank Statements)
- A Copy of the Lease Agreement for Each Rental Unit
Contact us today before you start the mortgage research process, and find the right answers to essential questions. We proudly serve clients throughout the Mid-Atlantic region, including Maryland, Virginia, Florida, and Washington, DC.