Purchasing a Home
Intro to homebuying
Types of Loans
A type of mortgage offered by private lenders, such as banks or mortgage companies, that is not insured by the federal government. Conventional loans are often popular because of their flexibility, with terms typically ranging from 10 to 30 years, and can be either fixed or adjustable rate. Borrowers seeking conventional loans often need to have a good credit score and a stable income, and may need to provide a down payment of at least 3% to 20% of the purchase price.
Three types of mortgages that are guaranteed by the federal government:
- Federal Housing Administration (FHA) loans are popular with first-time homebuyers because they allow for lower down payments and have less stringent credit requirements compared to conventional loans.
- Veterans Administration (VA) loans are offered to military service members, veterans, and their spouses. They typically require no down payment and offer favorable interest rates.
- United States Department of Agriculture (USDA) loans are designed for homebuyers in rural and some suburban areas. They offer low interest rates and the option to put no money down.
A type of mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Because a Jumbo is non-conforming, it cannot be guaranteed by Fannie Mae or Freddie Mac, which can make it a bit riskier for lenders. As a result, Jumbo loans often have stricter underwriting requirements and may require a larger down payment, a higher credit score, and a lower debt-to-income ratio compared to conventional or government loans.
A type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan. ARMs are initially set up like a fixed-rate mortgage during the initial period (from 3 to 10 years), after which the rate can change periodically based on an index reflecting the cost to the lender of borrowing on the credit markets. The appeal of an ARM is that it often starts with a lower interest rate compared to a fixed-rate mortgage, but there is the risk that interest rates (and therefore monthly payments) may go up over time.
When Should I Start Talking to a Mortgage Professional?
Opportunities for financing
Buying a second home or investment property?
The Loan Process
As there is no one-size-fits-all mortgage, there is no exact timeline for the loan process. For some customers, we can provide same-day prequalification. For most, the entire process can range up to several weeks. Here are the general steps for the mortgage loan process:
Get prequalifiedSit with one of our loan officers and they can help you determine the home price range you want to look for, based on your credit, income, and assets
ApplicationOnce you've found the property you want to purchase, or if you're refinancing, you'll fill out a mortgage application for a specific loan amount. Your loan officer will help find a product that fits your needs. We'll issue disclosures and you'll want to provide any/all documentation needed, as soon as possible
File openingWhen your disclosures and documentation come back in, we'll order the title, appraisal, and tax transcripts. Your initial employment verifications (if applicable) are completed. Flood certificates (if applicable) are obtained, and then your file moves into processing.
ProcessingThe lender reviews the initial file and verifies that sufficient information has been provided. Your file is submitted to underwriting.
UnderwritingThe underwriter ensures your loan meets all guidelines, then issues an approval with any outstanding conditions, or a Mortgage Commitment if only minor conditions remain.
From approval to Clear to CloseYour processor will work to obtain any documentation to clear any remaining conditions. This is resubmitted to underwriting, where it is reviewed, and when cleared, the underwriter issues a Clear to Close. With this in hand, the file moves to the closing department.
FinishOur closing department and closing agent work together to finalize numbers. There is a final verification of all debts, employment, and assets used for closing. Closing documents are drawn up. You'll meet with the closing agent, sign the documents, and receive the keys to your new property!
finance your dream property
Elite Mortgage Group LLC specializes in assisting first-time borrowers, who have not owned a home in at least three years, to explore available programs and benefits. While not universally applicable, these opportunities may encompass a lower down payment, reduced private mortgage insurance (PMI), potential interest rate reductions, and down payment assistance. Our expert team can guide you through the process, helping you leverage the program(s) tailored to your needs when the time comes to make your home purchase.
Are you self-employed and hitting roadblocks for home ownership because you can't provide proof of a standard W-2? Have other mortgage companies told you there isn't any way they can help?
Elite Mortgage Group LLC works with any type of borrower, so if you're self-employed and want to purchase or refinance a home, give us a call!