For The First Time Home Buyer - Lender says you are Pre-approved for a Loan!!!

So you took care of all the red flags ...the Lender is satisfied and the lender says you are PRE-APPROVED for a  certain loan amount.  What does this mean? 

It means that based on the information you provided you can now purchase a home up to a certain amount, whether $100,000, $250,000, $500,000.  I know, I know you are excited because you can buy a house for a certain amount, even more than you thought, yeah!!!!

Also your pre-approval can be a great negotiating tool when you make an offer on a property........

Now ....let me ...say here, that  just because the lender said you were approved for  more than you even thought.... that you have to go out and purchase a property for that total amount....now don't go spending more than you want to.

You can ask the Lender to  give you a pre-approval  letter for the amount you feel comfortable borrowing for a house.  

Once the loan application is signed, the lender has 72 hours to provide a Good Faith Estimate...this is required by Law.    This is just an estimate ...and it will let you know how much money will be required for closing the loan..once you purchased a property ...and what your monthly mortgage payments would be like...


The good faith estimate will also include costs for the appraisal, title search, title insurance, recording fees, attorney fees, loan origination fees.

I know...I know....you are thinking there you go again with all these different terms....don't worry I will let you know  what each of these terms mean, when you will use them throughout the process.....Don't worry....I have got your back.......will tell you more soon...!!!!!

For The First Time Home Buyer : Possible Issues That can Affect Your Loan Application Process

Now you are making your loan application and the lender runs your credit report and ........red flag...there is an issue with your credit..... Even though you know your credit score and lender said in the beginning they could work with you, there are some items on your credit that MUST be removed before you can get a mortgage loan.

****Do you have defaulted student loans?  Sorry..... but  you must bring these loans current  before you can get a mortgage loan. 


***If you are in arrears with your child support payments and it is reported on your credit history...You must bring the delinquent payment current into order to proceed with the loan application.


****It could also be that an account that you have paid off is still showing  a balance......Don't panic!!!
If this is the case then just check the 'date last reported' and 'date of last activity' to make certain that the information has been updated..... 


I know, I know you hate keeping all these papers around......But it is very important that you retain all paperwork regarding transactions and payment history.....You never know when you will need them!!!

Here's another tip ____ always keep the original copies of receipts  and other documents......Don't give them out....make copies.

I know.....you are thinking 'hey I know that, this is elementary'   Yeah, but sometime we forget......Just a gentle reminder.....Not trying to be your Mom!!!

Ha!! More tips coming soon!!!

For the First Time Homebuyer: Lender Jargon

So you have met with the Lender and you have asked the right questions......The Lender answers and you are like what?....say what???   He or she  starts throwing all these terms at you. 
Here are some common terms that will help you understand :-

Pre-qualification for a loan-  Pre-qualification  is an estimate of your purchasing power and can be done with a verbal statement.

Pre-approval for a loan is done by the Lender . You will have to complete a mortgage loan application,  provide recent pay stubs, bank statements  and any other supporting document your lender requires.

APR or Annual Percentage Rate - This is the finance charge expressed as an annual rate.

GFE or Good Faith Estimate - this is an estimate of your closing costs when you are purchasing a house.

PITI or Principal, Interests, Taxes (real estate) and Insurance.
* Principal - the original balance of money lent, excluding interest
* Interest - the amount a lender charges to borrow money, expressed as a percentage
* Taxes - real estate tax assessed by city or county
* Insurance - includes homeowner/hazard insurance and any mortgage insurance



Now you know....not so intimidating as you thought ....ha!!!  

For the First time Home Buyer: Questions for the Lender

So you decide to purchase the home....One of the first thing you need to do is to meet with a Lender to determine how much home you can buy....
You have an appointment to meet with the Lender....then you wonder what are some of the questions I ask?
"OMG ....I have a brain freeze!!"   Do you ...then let me help you out..here are some questions you can ask

What types of loans do your offer?  Fixed Rate or adjustable rate? 
What is your current  interest rate for a  30 year fixed rate loan?
Does the loan require mortgage insurance premium or  private mortgage insurance?
Can you lock in the rate?