The lending professionals at Wealthstar Mortgage are dedicated to helping you with all your home mortgage needs. With our constantly changing housing and mortgage markets, we can help you navigate the many options to find the right loan to fit your family, your needs, and your financial circumstances. Whether you are refinancing, Buying your first home or building your dream home, we can help you explore the many options we have for financing.
WORDS YOU SHOULD KNOW
APPRAISAL: A written estimate of a property’s current value.
ADJUSTABLE RATE-MORTGAGE (ARM): A mortgage with an interest rate that changes during the life of the loan according to movements in an index rate. Sometimes called AMLs (adjustable mortgage loans) or VRMs (variable-rate mortgages).
AMORTIZATION TERM: The length of time required to amortize the mortgage loan expressed as a number of months. For example, 360 months is the amortization term for a 30-year fixed-rate mortgage.
BROKER: An individual or company that brings borrowers and lenders together for the purpose of loan origination.
BUYDOWN: When the seller, builder or buyer pays an amount of money up front to the lender to reduce monthly payments during the first few years of a mortgage. Buydowns can occur in both fixed and adjustable rate mortgages.
CLOSING: A meeting held to finalize the sale of a property. The buyer signs the mortgage documents and pays closing costs. Also called “settlement.”
CLOSING COSTS: Fees associated with buying a house that your lender charges and/or you rack up from various third parties.
CONVENTIONAL MORTGAGE: A mortgage loan not insured by the government or guaranteed by the Veterans’ Administration. It is subject to conditions established by the lending institution and State statutes.
CONSUMER REPORTING AGENCY (or Bureau): An organization that handles the preparation of reports used by lenders to determine a potential borrower’s credit history. The agency gets data for these reports from a credit repository and from other sources.
CREDIT REPORT: A report detailing an individual’s credit history that is prepared by a credit bureau and used by a lender to determine a loan applicant’s creditworthiness.
DEED OF TRUST: The document used in some states instead of a mortgage. Title is conveyed to a trustee.
DOWN PAYMENT: The amount of your home’s purchase price you pay upfront.
FHA MORTGAGE: A mortgage that is insured by the Federal Housing Administration (FHA). FHA loans are designed to make housing more affordable.
EARNEST MONEY: A deposit made by the potential home buyer to show that he/she is serious about buying the house.
EQUITY: The amount of financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on the mortgage.
ESCROW: An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit of funds or documents into an escrow account to be disbursed upon the closing of a sale of real estate
FANNIE MAE: A congressionally-chartered, shareholder-owned company that is the nation’s largest supplier of home mortgage funds.
FHA MORTGAGE: A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
INSTALLMENT: The regular periodic payment that a borrower agrees to make to a lender.
INTEREST: The fee charged for borrowing money.
PMI (Private Mortgage Insurance): The monthly insurance payment a lender must pay if the down payment is less than 20% of the sale price.
PRE-APPROVAL: An evaluation by a lender that determines if the potential buyer qualifies for a loan and, if so, the maximum amount the lender would be willing to lend.
SELLER ASSIST: Money given from the seller to the buyer at settlement to pay for part of the closing costs. The amount varies depending what the mortgage company allows.
Here are some of the most common documents that may be required when applying for a mortgage.
Having these documents ready could help your mortgage application go as quickly and smoothly as possible.
- Driver’s license and social security card
- Copies of two most recent pay stubs for each applicant
- Names and addresses of employers for the last two years
- W-2s for the last two years
- Copy of tax returns for the last two years
- Bank statements for the last two months
- Proof of pension income, if applicable
- Social Security and Disability payments, if applicable
- Dividend earnings or bonus, if applicable
- Divorce decree, if applicable
- Child support or alimony payments, if applicable
- Security accounts (stocks, bonds, life insurance)
- If self-employed: your year-to-date P&L statement
We will let you know what additional documentation is needed for specific loan options.
Once you have found the home you want and are ready to move forward with your mortgageapplication, we will need to a copy of the home purchase contract signed by you and the seller, and a copy of the earnest money deposit check.
Because every situation is different, you may be required to provide additional documentation. Contact us and we will help you determine what is needed.
MORTGAGE DO'S AND DONT'S
While you are considering the purchase of a new home, you need to be aware of what things might adversely affect your loan. Your credit, income and assets are verified after you submit your application and, in some instances, right before closing.
Following these tips throughout the loan process can be very important:
DO CALL YOUR MORTGAGE CONSULTANT
If you are unsure if something will impact your loan, call your representative.
DO KEEP ORIGINAL DOCUMENT
Keep originals of all paystubs, bank statements and other financial documents.
DO PAY ALL YOUR BILLS ON TIME
Late payments on current accounts like mortgage, car payment, charge cards, etc. will impact your credit score which identifies your likeliness to repay your debts. Make your mortgage payments on time but call your loan representative before you make any payments that are scheduled within two weeks of closing.
DON’T APPLY FOR NEW CREDIT or INCREASE ANY CREDIT LIMITS
Avoid making major purchases such as cars, lines of credit for furniture, appliances, computers, etc. If you receive an invitation to apply for new lines of credit or to increase existing credit, don’t respond. If you do, that company will pull your credit report and this will have an adverse effect on your credit score.
DON’T MAX OUT or OVER CHARGE EXISTING CREDIT CARDS
Running up credit cards is the fastest way to bring a credit score down. Try to keep credit cards below 30% of the available limit.
DON’T CONSOLIDATE DEBT or CLOSE CREDIT CARD ACCOUNTS
This may change your qualification ratio of debt to available credit which also affects your credit score. You want to keep an active beneficial credit history on your record. If you really want to do these things, do it after you close your mortgage loan.
DON’T RAISE RED FLAGS
Do not co-sign on another person’s loan or change your name and address. The less activity that occurs while your loan is in process, the smoother the process will be.
DON’T CHANGE JOBS
Employment stability is a big factor in the underwriting process. Quitting, changing jobs or even changing positions in same company can greatly impact your loan approval. Inform us immediately of any changes to your job, position, or income.
TEXAS CONSUMERS COMPLAINT AND RECOVERY FUND Notice
Figure: 7 TAC §80.200(b)
“CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”
RENTING vs. BUYING
Several things should be taken into consideration when deciding between buying a home or renting.
Although most considerations remain the same across the country, some could differ based on your financial situation and the current real estate market. The following information may help you decide which option best meets your needs.
Some potential reasons to rent:
- You do not intend to live in the region for more than a year.
- You are highly uncertain about the security of your employment.
- Renting also allows you to adjust to loss of employment by transitioning to a lower payment, thereby minimizing monthly costs.
Some reasons to buy a home:
- You can usually own a home for a similar monthly payment vs. renting.
- Real estate typically builds equity for a good return on the investment.
- Potential tax deductions for loan interest.
- Purchasing a property usually affords you more living space.
- You can customize and upgrade your property as you need and want.
TIP: Estimate the cost of buying a home versus renting. (you will base this estimation on current interest rates and the present real estate prices). When prices of homes are trending downward, prices for rentals may not follow the same trend. Therefore, a slow real estate market can be the opportune time to purchase a home.
However, before you do anything:
- Consult with a mortgage lender to help you calculate potential mortgage payments.
- Contact a real estate agent for current real estate market details.
Only with current information, can you make an educated decision!
FREQUENTLY ASKED QUESTIONS (FAQ)
It is normal to have lots of questions, and lots of them. Your Loan Originator at Wealthstar Mortgage is available to answer them all. To get you started, answers to homebuyers’ frequently asked questions are listed below.
What is the first step I should take?
Getting pre-approved is the first step you should take. Real Estate Agents generally will not begin helping you find a home until they know you are qualified for a home loan and know how much you can borrow. Your Loan Originator will determine your qualifications and even issue a “pre-approval letter” to you and your real estate agent.
What loan amount do I qualify for?
How much you can borrow depends on your income compared to your monthly debts, the type of loan, available assets, and current interest rates. Your Loan Originator will help you determine the monthly mortgage payment you can afford.
How long is the mortgage process?
The process with Weatlhstar Mortgage takes only 3-5 weeks for most loans. Sellers and borrowers may not be ready that quickly to complete the transaction – and that’s just fine. We will time the closing to correspond with dates outlined in your sales contract with the seller.
I do not have a Real Estate Agent yet. Can Wealthstar Mortgage refer one to me?
Yes! Wealthstar Mortgage works with hundreds of Real Estate Agents. It would be our pleasure to help you find someone to represent you with your search. Please ask your Loan Originator for recommendations based on his/ her existing Real Estate Agent relationships.
What are closing costs?
Closing costs are the fees paid when your loan transaction is completed. Typical closing costs include: attorney’s fees, title insurance, discount points, escrow items, and underwriting fees to name a few. Sellers can give a credit to offset these costs, or even pay them entirely.
What are discount points?
Discount points are a form of pre-paid interest to reduce your interest rate. One point equals 1% of the total loan amount. Essentially you are paying a little interest at the start of your loan to save much more over the term of your loan.
What is Private Mortgage Insurance (PMI)?
PMI enables you to purchase a home with less than a 20% down payment and enables you to obtain government insured programs. It is a monthly amount added to the mortgage payment to protect the lender in the event a borrower defaults on a mortgage.
What is a mortgage escrow account?
Mortgage escrow accounts automatically budget the borrower’s property tax and hazard insurance responsibilities over the course of a year. Homeowners do not have to worry about coming up with several large, lump sum payments. The escrow ensures that there is enough money to pay these bills when they are due. This prevents the homeowner from facing lapsed insurance coverage or delinquent taxes.
Talk to the Experts at Wealthstar Mortgage Help you Choose the the Best Loan to Finance Your Home Purchase
Why Choose Wealthstar Mortgage?
Wealthstar Mortgage is dedicated to providing the highest level of customer satisfaction in the mortgage loan process. We are a local, service-oriented mortgage company with an unmatched record of service and support.
Our goal at Wealthstar Mortgage is to get to know you and fully understand your needs, so that we can provide you with right loan to finance the right home you have selected.
Wealthstar Mortgage is the right choice for the reliable partner you will need when buying or refinancing your home.