Ayers Realty
Ayers Realty
807 Shorter Ave Rome, GA 30165      706-232-1112     
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Things To Consider When Getting A Mortgage

January 21, 2013 4:13 pm

When you apply for a mortgage you need to have your important documents organized, a good credit history and a good pen but what else is involved? Below are some things to consider when looking for a mortgage:

  • Shop for a mortgage and compare the terms of various lenders. Aside from rates, points, etc. find out how long you can lock in a rate and get it in writing.
  • Find out what points are involved. There are two kinds of points, pre-paid interest points which lowers your interest rate and origination points which is basically a fee to get the loan.
  • You also need to find out what closing fees (attorney, filing, taxes, etc.) are involved.
  • Do you want a fixed or adjustable rate (ARM)? Adjustable rates are lower than a fixed rate for the first few years but can go up whereas a fixed rate never changes.
  • If you go with a fixed rate do you want a 15, 20 or 30year loan? If you can afford the higher monthly payments of a shorter-term loan then you will pay substantially less interest over life the term and you'll build up your equity faster.
  • How much do you have for a down payment? If your down payment is 20% or more of the purchase price then you may be able to avoid monthly Private Mortgage Insurance (PMI) charges.
  • Documents you'll need are: latest bank statements, latest W-2s and tax returns, copy of latest pay stubs, child support or alimony records, IRA and 401k statements, investment account statements.
  • If part of your down payment is a gift from a friend or relative you'll need a letter from the donor explaining that you are not obligated to repay them.
  • When you apply for a loan your lender is required by law to give you the following: Truth-in-Lending Disclosure, A Home Buyer's Guide to Settlement Costs, ARM Disclosure, Your Annual Percentage Rate or "APR". Make sure you receive these documents and read them.
  • When you apply for a loan the following will be done by your lender: an appraisal of the property you wish to buy, review of you credit history, employment and bank account verification.

With the above in mind, it's not really that difficult to secure a loan you can live with. Just get your documentation organized and compare all the alternatives you find.

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