Purchase a Home/First Time Home Buyer:

How much of a down payment will I need?

Depending on the loan amount and loan program you may be able to put as little as $500 down. 

How much money do I need to have left after closing?

Typically, at least two months PITI are required in reserve after closing. In addition, many programs require little to no reserves. The amount varies with the loan to value ratio.

What are the advantages of making a higher down payment on a loan?

The more you put down, the more you will lower your monthly mortgage payment and the total interest you will pay over the life of your loan. If you put 20% or more down, private mortgage insurance (PMI) is not  required on conventional loans.

What is PMI?

Private mortgage insurance (PMI) is required if your down payment is less than 20% of your purchase price. Private mortgage insurance protects the lender in the event you default on your loan. Private mortgage insurance payments are included in your monthly mortgage payment.

What are the advantages of making a lower down payment on a loan?

The less you put down, the more cash you will have on hand for other investments or emergencies. Additionally, since mortgage interest is deductible, you will increase your tax deduction.

Can I apply for a loan before I find a property?

Yes. In fact, it is advisable to obtain a pre-approval from your Platinum Home Mortgage Consultant. This pre-approval will provide the leverage of a cash buyer during your negotiation of the home of your dreams.

What is the difference between a pre-qualification, a pre-approval and an approval?

A pre-qualification is a basic calculation to determine how much you can borrow based on your stated income and debt. A pre-approval is a commitment from a lender to provide you with a loan based on a review of the documents supporting your stated income and debt.  An approval takes into account the home you are purchasing and your ability to repay the loan.

What is an adjustable rate mortgage (ARM)?

An adjustable rate mortgage (ARM), also known as a variable rate mortgage, is a loan with an interest rate that changes periodically. This means your monthly payment may fluctuate during scheduled intervals. Rates typically adjust once a year based on a market index.

What is a fixed rate mortgage?

A mortgage in which the interest does not change during the entire term of the repayment. 

Which is better in a rising interest rate market, an adjustable rate mortgage or a fixed rate mortgage?

In a rising interest rate market, a fixed rate mortgage is better since the rate does not change. 

Which is better in a falling interest rate market, an adjustable rate mortgage or a fixed rate mortgage?

In a falling interest rate market, an adjustable rate mortgage is better because the interest rate has the ability to decrease.

What are points?

Points are fees paid to lenders generally to receive a lower interest rate. One (1) point = 1% of the loan amount. On a $100,000 loan 1 point = $1000. Points may be further classified into origination points or discount points. 

Do I have a choice of points or no points, and how do I determine whether or not to pay points?

For most programs, there are multiple pricing options with different points and interest rates. The interest rate varies with the number of points you pay. The more points you pay the lower the interest rate. As a rule, the longer you intend to hold on to your mortgage the more advisable it is to pay more points for a lower interest rate.

How much will my closing costs be?

Closing costs vary by loan and by state. Once you select a loan program, your mortgage consultant will provide you with a good faith estimate, which outlines your closing costs.

What is a good faith estimate (GFE)?

A good faith estimate is a written estimate of closing costs, which a lender must provide within three days of submitting an application. 

What is an APR?

An APR or annual percentage rate is the effective rate of interest for a loan per year. This rate is typically higher than the note rate because it takes into account closing costs. This is one way to compare loan programs offered by different lenders. 

What does my monthly payment consist of (PITI)?

Your monthly obligation consists of four costs – principal, interest, property taxes, and insurance. Depending on your loan, all four of these costs may be included in your monthly payment. Should PMI be required an additional insurance item will be added. A greater percentage of down payment may give you the option of paying only principal and interest. In that case, you are responsible to pay the property taxes and insurance when due.

How can I obtain a copy of my credit history?

While working with a Platinum Home Mortgage Consultant they will pull a copy of your credit report to review with you. There are also on line sources such as credit.com as well as others. However, each time an inquiry is made into your credit history, your credit score could be adversely affected. Again, consult with your Platinum Home Mortgage Consultant. 

What documents am I responsible for?

In most cases, you will need to provide some documentation for your loan. These can include copies of your W2's, paycheck stubs and bank statements. If you are self employed, you will need to provide the last two years of your personal and business tax returns.