FREQUENTLY ASKED QUESTIONS

HOW LONG DOES IT TAKE TO SETTLE?

Typically between 30-45 days. It will be closer to 30-35 days for a regular loan without any assistance programs and closer to 45 days if using an assistance program such a first time homebuyer program.

IF THERE ARE TWO PEOPLE ON A LOAN, WHO’S CREDIT DO WE USE?

Each person gets three credit scores when a report is pulled, one from each credit agency. The middle of the three scores is the one we have to use for scoring. If there is more than one person on a loan we have to use the lowest middle credit score of all people on the loan.

WHAT FACTORS INFLUENCE CREDIT SCORES?

Factors that influence credit scores include history of accounts, variety of accounts, balances on accounts, late payments on accounts and collection accounts.

AM I ALLOWED TO RECEIVE A GIFT WHEN BUYING A HOUSE?

Yes, gifts are typically allowed but it will depend on the loan type or program you choose. Gifts are only allowed to come from relatives and we also have to document the transfer of funds.

HOW DO YOU DETERMINE INTEREST RATES?

Factors that influence interest rates include loan type, loan amount, credit score, whether the home will be a primary residence or an investment property, and whether the home is a condo or not.

HOW LONG DO I HAVE TO WAIT AFTER A BANKRUPTCY?

The typical grace period after a Chapter 7 bankruptcy is 4 years. If extenuating circumstances can be documented then two years may be permitted.

HOW LONG DO I HAVE TO WAIT AFTER A SHORT SALE?

The typical grace period after a short sale is 3 years.

WHAT GOES INTO A TOTAL MONTHLY PAYMENT?

A total monthly payment includes principal, interest, taxes and insurance (PITI). Other additional costs would be any HOA/condo fees if applicable.

WHAT ARE CLOSING COSTS?

Closing costs are additional costs to buying a home aside from the down payment. There are two types of closing costs; transaction costs and prepaid costs (escrows). Closing costs are negotiable with the seller, meaning the seller is allowed to pay for a portion or all of them.

HOW LONG DOES IT TAKE TO SETTLE ON A HOUSE?

It typically takes between 30-45 days to settle once you are under contract. However, CDA (first time homebuyer) loans require at least 40-45 days to settle. It is much easier to move settlement dates up than to move them back so more time is always preferred.

WHY DO I NEED AN APPRAISAL?

An appraisal is a lender requirement. Appraisals are meant to ensure that the home you are buying is worth what you are paying. You are allowed to underpay but are not allowed to overpay. Therefore is it acceptable is the value comes in higher than the agreed upon sales price but is unacceptable is the value comes in higher.

DO I HAVE TO GET A HOME INSPECTION?

A home inspection is not a lender requirement, however they are a good idea and are always recommended. The inspection is meant to address any issues there may be with a home. Realtors will typically refer their clients to a home inspector that they work with often.

HOW MUCH MONEY DO I NEED FOR A DOWN PAYMENT?

Down payment amounts will vary depending on the loan type.  Your down payment could be anywhere from 3%, 3.5%, 5%, 10% up to 20% or more.  Some loan types will even offer 100% financing (no down payment). Additionally, when you add in the down payment assistance program, you can get in to a home for as little as 1% of a sales price.

WHAT IS AN EMD?

An EMD (earnest money deposit) is a check that a buyer writes and attaches to an offer. The EMD is supposed to show the seller that they are interested by putting some ‘skin in the game’. The amount of an EMD is typically about 1% of a sales price, but there is no maximum or minimum amount.

WHAT IS TAX DEDUCTIBLE WHEN OWNING A HOME?

Both property taxes and mortgage interest are tax deductible.

WHAT IS HOMEOWNERS INSURANCE?

Homeowners insurance (hazard insurance) refers to the insurance coverage of the structure of the home and covers ‘hazards’ such as fire or hail damage. Homeowners insurance is required when getting a mortgage.

TYPES OF EMPLOYMENT

SELF-EMPLOYED | Need two year history in job and have to average

PART-TIME | Need two year history in job and have to average

COMMISSIONED | Need two year history in job and have to average

FULL TIME | Do not need two year history in job and do not have to average

SALARY | Do not need two year history in job and do not have to average