Buying your first home doesn't have to be over complicated. There are 4, easy to understand steps to getting a mortgage. At Trident Home Loans, we pride ourselves on establishing a relationship with you that you can trust - and then we can take care of the details and do most of the work for you. We do it all the time. We know the pitfalls and we know the right answers.
Q: When should I get qualified for my loan?
A: It's never too soon to get pre-approved. That way if there are any issues that you need to be aware of, you will have more time to take care of them.
Q: What is a Rate Lock?
A: A lock-in, also called a rate-lock or rate commitment, is a lender's promise to hold a certain interest rate, usually for a specified period of time, while your loan application is processed.
Q: What is a Buydown Option?
A: Borrowers can offer to pay a lender points (one point equals 1% of the loan amount) as a method to reduce the interest rate on the loan.
Q: What is a Good Faith Estimate?
A: A good faith estimate, referred to as a GFE, must be provided by a mortgage lender or broker in the United States to a customer, as required by the Real Estate Settlement Procedures Act (RESPA). The estimate will include an itemized list of fees and costs associated with the loan. A Good Faith Estimate is intended to be used to compare different offers (or quotes) from different lenders or brokers. The Good Faith Estimate is only an estimate. The final closing costs may be different; however the difference can only be 10% of the third party fees.
Q: What is a HUD-1 Settlement Statement?
A: The HUD-1 Settlement Statement is a standard form in use in the United States of America which is used to itemize services and fees charged to the borrower by the lender or broker and all parties of the transaction when applying for a loan for the purpose of purchasing or refinancing real estate. HUD refers to the Department of Housing and Urban Development.
Q: What is PMI?
A: Also known as "Primary Mortgage Insurance," PMI is the lenders (banks) protection in the event that you default on your primary mortgage and no longer make payments and the home ends up going into foreclosure.
Q: Can I Eliminate PMI?
A: Private mortgage insurance, often referred to as PMI, is insurance that lenders require borrowers to pay for when they get a mortgage and don't have enough equity in the home. Generally, this means coming up with a 20% down payment when buying a home to avoid paying the PMI premium. There are also loan programs, such as VA, that do not have PMI.
Q: Can I Finance Closing Costs?
A: Is some cases, Yes. When refinancing your current mortgage you can roll in your closing costs. Also, with the USDA program, if there is enough equity in the property, you may be allowed to roll in your closing costs at the time of purchase.
Q: What is a Credit Score?
A: A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information typically sourced from credit bureaus.
Q: Can I Improve my Credit Score?
A: Yes, there are always ways to improve your credit score such as paying down balances on credit cards.
Q: Can I Dispute a Credit Score?
A: Yes. Contact the credit reporting bureaus immediately and explain any mistakes, presenting any evidence you may have for your case. With any luck, the credit bureaus will recognize what has happened, remove the offending material from the report, and as a result, your credit score will go up.