Stress Free Finance

Buying a home could be the most thrilling, baffling and stressful financial transaction you ever undertake. Even if you have done it numerous times you can still find the process complicated and intimidating, particularly when it comes to getting a loan for a house. Countless loan documents, obscure terminology and anxiety serve to temper the joy of buying a new home. As soon as the sales contract is ratified, securing the financing for the purchase becomes pre-eminent for all but a very few home buyers. If you master the steps required to qualify for a mortgage, however, much of the stress can be avoided. The following explanation of the loan application interview process is intended to help you through the intricacies of qualifying for a loan.

The Loan Application Interview

Once you have elected a mortgage lender, the next step will most likely be a conference with a loan officer or other lender representative, whose job is to begin the collection of information the lender desires to approve the mortgage. They will clarify the types of mortgage loans available to you, the interest rates and fees for each type and the qualification requirements. During the meeting, the loan officer will fill out, or assist you in filling out, the loan application form.

By this time you should have a good idea of the general interest rates and fees being charged in the area. The total cost of a mortgage loan consists of the interest rate on the loan, origination fees, discount points, and miscellaneous other charges. One point is equal to one percent of the amount of the loan and is usually collected at the loan closing, or settlement. The interest rate affects the amount of the monthly payment, while points affect the amount of cash you must have at closing. Most lenders will offer a range of interest rate/point combinations to meet the borrower needs. In general, the higher the interest rate, the lower the points. For example, if the current market provides for an 8.5 percent interest rate with 2 points, a nine percent rate may be offered at no points. If you are a corporate transferee, however, your company’s relocation policy may pay all or part of origination costs and the lower rate will have more appeal. The loan officer is prepared to explain all of the mortgage information and your options to you when buying a home.

Robert Earl - Founder of The Earl of Real Estate Team is a Real Estate Entrepreneur & Real Estate Coach serving the Northern Virginia Real Estate Market. The Earl of Real Estate Team loves working with Reston VA Real Estate, Condos, Townhomes & Homes for Sale

- Robert Earl The Earl of Real Estate