Frequently Asked Questions
Can I buy a home with very little money?
Yes, there are loan options that allow for no money down, and seller paid closing costs. Some programs allow for gift funds from relatives as well.
Can I buy a house if I have filed bankruptcy?
Yes, and it may be sooner than you think. Normally, the waiting period is 2 to 3 years after bankruptcy, but in some cases, it can be less than that.
What is PMI?
PMI is an abbreviation for private mortgage insurance. PMI is required on conventional loans with less than 20% down payment. It is required on all FHA loans. The required time to pay PMI varies with each loan program and down payment. VA loans do not have PMI, USDA loans have a similar (less expensive) monthly fee, which is called a monthly maintenance fee. Eligible borrowers can obtain conventional financing up to 95% LTV with the lender paying the PMI.
What are closing costs?
Closing costs are the fees associated with obtaining the mortgage loan. These fees include, but are not limited to appraisal fee, testing fees, title search and title insurance fees, state sales tax, bank fees, filing fees, escrow setup, tax prorations and flood certifications. You should ask for a loan estimate detailing the fees.
What are the benefits of using a mortgage broker?
The biggest benefit is that a mortgage broker has access to several lenders. That means, there are more loan options available to the borrower. Since the mortgage broker is not funding the loan, the mortgage broker will shop to get you the best rate possible. A direct lender may only be able to offer their programs at their set rate.
I have a previous foreclosure, how long do I have to wait to buy another home?
The usual waiting period is 3 to 4 years after the foreclosed home has been sold to a new homeowner, not the date the foreclosure started. Each loan program has a specific waiting period.
What is an ARM?
An ARM is an adjustable rate mortgage. This means that the initial interest rate is fixed for a set period of time, then the rate can adjust based upon the terms of that particular program. The terms of these loan programs should be explained in detail, so you fully understand how the rate and payment adjusts.
What if I have been denied by another lender?
Each lender has their own rules with regards to mortgage qualification. Don’t give up. We may have a program that allows for lower credit scores and more flexible underwriting.
Refinancing out of privately held mortgages, lease purchase conversions, for sale by owner purchase loans, 1 day out of bankruptcy purchase loans, lower credit score loan options available to eligible borrowers.
What documents do I need to provide to obtain a mortgage?
After you have made mortgage application, have received the required disclosures and have expressed intent to proceed, you will be asked to provide income documents. For example, the previous month’s pay stubs, last two years’ w2s, in some cases last two years’ federal tax returns. Other documents may be asked for depending upon the source of the income. You will also be asked to provide the latest two months’ bank statements to show your assets. Sometimes, this also includes 401k statements, investment accounts, etc. You will also be asked to show a valid photo id and another form of identification.
Why is the realtor asking me to put money down on the contract when I am applying for a no money down mortgage?
I understand this can be confusing. This is called an earnest money deposit. It shows the seller that you are serious about buying the property. If you are doing a no money down mortgage, the earnest money deposit will credit toward any closing costs you owe at settlement. If the seller is paying all the closing costs and the mortgage program allows, then this money or a portion of it will credit back to you at settlement.
South Central Pennsylvania
NMLS Broker #130919
Licensed by the PA Department of Banking and Securities Broker #27265
Kimberly Jane Bickers, Mortgage Loan Originator NMLS MLO #131191 PA MLO #28928