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Lake Gaston Real Estate - Financing Tips
EXIT Town & Lake Realty

Aquiring a Mortgage Loan
Finding a mortgage loan with the best terms to meet your needs is important. Typically, a mortgage approval requires 30-45 days for conventional loans, 45-60 days for VA and FHA loans from application to approval. I can assist you in finding a loan for your Lake Gaston Real Estate purchase.

Where to Find Mortgage Money
Mortgage Lenders - issue mortgages to borrowers. They then process and sell the mortgages to large investors or into the secondary mortgage market. The Lake Gaston area has many Mortgage lenders to choose from. As your Lake Gaston Realtor, I can assit you in finding the right lender.

Mortgage Loan Brokers - often represent many investors and can provide you with many more financing alternatives and solutions, usually at the same rate as a mortgage banker. I can recoommend a mortgage loan broker in South Hill VA or other areas in and around Lake Gaston.

Financial Institutions - Savings and loan companies, mutual savings banks,  insurance companies, creidt unions, and some commercial banks are the customary sources of mortgage loans. Savings and Loans often grant favorable terms to their own account holders. There are many Financial Institutions to choose from in local areas of Lake Gaston.

Private Lenders - Individuals and groups lend money. This source is especially helpful in arranging second mortgages, but can also assist with first trusts, wrap-arounds, and other mortgage plans.

Credit Unions - Federal credit unions can write 30-year conventional and government insured mortgages.

Finance Companies - To compete with the more traditional lenders, some finance companies promise quick service and some do not charge mortgage points or pre-payment penalties.

Ten Questions Most Lenders Will Ask You
  1. How much money do you wish to borrow and how long will you need the money?
  2. What is your current address and any other addresses you've lived at in the previous 24 months?
  3. What are the Social Security Numbers of the borrowers?
  4. What is the borrowers current employer's name, address and phone number and other employers previously worked for in the last 24 months?
  5. What is the gross monthly income for borrowers? Documentation must be supplied including most recent pay stub, final pay stub for any job borrowers may have left in the current year and previous year's W2 form(s).
  6. Do you have complete account statements for any bank, credit union, retirement, or brokerage accounts?
  7. What are your assets, i.e., real estate, personal property, stocks and bonds, life insurance with cash value, etc.?
  8. What debts to you currently have? (Including account numbers, balances and minimum payments.)
  9. Do you have a copy of the sales contract for the property you are purchasing?
  10. Are you aware of any problems concerning your application? You must provide documentation of the circumstances of those problems.

Lender steps to process your application:

  1. Verify personal and financial information.
  2. Obtain a credit report for each borrower.
  3. Get the property appraised.
  4. Review all documents provided for your application.
  5. Determing whether or not to approve the loan.
Questions You Should Ask Most Lenders
  • Are both fixed-rate and adjustable mortgage loans available?
  • What is the current interest rate?
  • What is the total origination fee and are there any points involved?
  • Can I lock-in the financing at the current interest rate, and if yes how long?
  • What other fees, if any will be charge to me in conjunction with my loan?
  • Are funds for a second mortgage available?
  • If I choose an adjustable loans, how often will the interest rate be adjusted? Is there a maximum limit on each rate adjustment? How often will the monthly payment be adjusted? Is there a ceiling on payment adjustments? Can the term of the loan be extended?
  • Is there a pre-payment penalty clause should I pay off loan early?
  • What is the grace period if I am late making a payment? What will happen if a payment is missed?
  • If I sell my property, will the new buyer be able to assume my mortgage at the same interest rate?
  •  Does the lender require mortgage insurance?

Different Mortgage Strategies
When it comes to financing a home or property, buyers have numerous financing options. Below is a description of some choices. Information about rates and programs is available from your EXIT Realty Associate. 

Conventional - VA/FHA
Conventional Mortgage - A conventional loan is a mortgage made between a lender and a borrower with no other parties involved (such as VA or FHA). Conventional loans normally require a 20% down payment. Down payments could be as low as 5% with mortgage insurance (PMI).

Example: A buyer purchases a $400,000 home. The lender requires a 20% down payment ($80,000). At 7% the $320,000 balance has a monthly Principal &Interest payment of $2,391 over 30 years. Mortgage insurance could lower the down payment requirement to 5%, or $20,000, which increases the monthly payment.

Advantage: Conventional mortgages are straightforward and easy to understand. Conventional loans offer the largest variety of financing options.

Fixed Rate conventional loans feature equal monthly payments that are made over the term of the mortgage. The typical standard time frame is 30 years or less. The interest rate remains the same during the term of the loan which keeps the principal and interest payments the same. Although monthly payments may vary if taxes or insurance escrow payments increase or decrease.

Adjustable Rate loans are mortgages that allow for payments which change periodically over the life or term of the loan. An ARM loan has a set interest rate and payment for a period of time and then adjusts to the market rate at a predetermined point. ARM loans feature lower rates over the initial loan period.

VA Loans (Veteran Administration) - Veterans Administration is a branch of the US government. The are not a lender but rather guarantee mortgages for lenders to assist eligible veterans. VA loans require no down payment up to the VA maximum loan limit. VA loans can be assumed by qualified borrowers.

Example: A veteran purchases a $235,000 home. With no down payment the loan amount is $240,050 including the VA Funding Fee, for a first time veteran's purchase. At 6% interest over 30 years the monthly Principal & Interest payment is $1,439.

Advantage: VA requires no down payment. The seller can (but is not required to) pay all closing costs for a veteran.

FHA Loan -  FHA is the Federal Housing Administration, a division of the US Department of Housing and Urban Development. FHA doesn't do the lending; instead, it insures mortgages allowing lenders to make loans that might not be eligible for conventional financing. Down payments can be as low as 3.5%*. Both fixed-rate and ARM mortgages are available. FHA loans are assumable by qualified borrowers, have credit standards and other rules that are more flexible than typical conventional loans.

Example: A buyer of a $200,000 home makes a down payment of $7,000. The loan amount including up-front MIP would be $199,755. At 6% interest over 30 years the monthly P&I payment is $1,198.

Advantage: FHA offers a low down payment.

Contact Connie Thompson today for all of your Lake Gaston real estate needs!

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