BUYING VS. RENTING
This may surprise you, but a monthly mortgage payment is often less than what you might pay for rent. In fact, with just 1% down, you could save more than $600/month on a $250,000 home purchase and avoid monthly mortgage insurance.
PURCHASE A $250,0000 HOME
BUY: $1,597.85* (30-YEAR FIXED) VS RENT: $2,200 MONTHLY
*With the 1% Down program, the borrower puts down 1%, the lender contributes 2%, giving the borrower 3% equity at closing. The principal and interest payment on a $242,500 30-year Fixed-Rate Loan at 4.625% and 97% loan-to-value (LTV) is $1,285.35 with -1.153 points due at closing. The Annual Percentage Rate (APR) is 4.624%. The principal and interest payment does not include taxes and insurance premiums, which will result in a higher actual monthly payment. Taxes and insurance are estimated and will vary with each loan. *Includes estimated taxes and insurance. Pricing calculated on March 31, 2017.
5 HOME BUYING MYTHS
There are a lot of myths about buying a home that are easy to bust.
Here are a few of the big ones:
1. I NEED A 20% DOWN PAYMENT.
This goes back to the days when lenders had far fewer options. Now, you can get a mortgage for as little as 1% down and still have a low monthly payment.
2. I HAVE TO DIG UP A LOT OF PAPERWORK.
A lot goes into qualifying you for a mortgage, but these days much of the verification process — like collecting pay stubs, bank statements and tax information — can be done automatically by your mortgage broker and lender.
3. IT WILL TAKE A LOT OF TIME.
A good mortgage broker can take your application and give you a pre-approval letter in minutes. Many even let you do it yourself online.
4. MY BANK IS THE BEST PLACE TO GET A MORTGAGE.
Banks don’t offer many mortgage choices. An independent mortgage broker in your local community can help you find the best options and the lowest rates.
5. I NEED TO BE “SETTLED DOWN” FIRST.
Even with a low down payment, monthly mortgage payments are often lower than rent prices. Plus when you buy a home, you’re paying yourself, not your landlord.
WHAT TO EXPECT DURING THE LOAN PROCESS
The mortgage process is pretty straightforward, but knowing what to expect will help everything go smoothly.
STEP 1: ELECTRONIC LOAN APPLICATION AND DOCUMENT PACKAGE
- You’ll receive a secure link to E-sign your documents, saving you valuable time.
- A Loan Estimate is included in this package. This is an itemized list of the fees that you may be charged for your home loan transaction.
STEP 2: LOAN APPROVAL
- Once your loan application is reviewed, you may be asked for additional documentation.
- Return the requested documentation as quickly as possible.
STEP 3: APPRAISAL
- A licensed appraiser will need to inspect the property and determine a value. (If your loan application receives a Property Inspection Waiver, no appraisal will be needed.)
- The appraisal cost is typically paid prior to the inspection.
STEP 4: CLOSING DISCLOSURE
- This is the final list of fees that you will be charged for your loan.
- You will receive this document at least three days prior to your closing.
STEP 5: VERBAL VERIFICATION OF EMPLOYMENT
- A call will be placed to your employer; it’s important they respond promptly.
STEP 6: FINAL CLOSING
- When your loan is fully approved, your employment has been verified, and you are ready to close on your home, we will schedule a convenient time to sign the final documentation.