I have decided to buy a property, what do I do next?
Before homebuyers start looking for a property, I recommend homebuyers to
contact first a lender to be pre-qualified for a loan.
Where do I look for a
home-loan?
There are many sources, you may contact your local Bank, Mortgage
Brokers, Saving & Loans, Credit Unions or visit lenders in the Internet.
Ask for appointments to find out more about mortgage loans. For the most part lenders are competitive,
but shop around to compare
rates, loan products, lenders' fees, etc.. If you can not find a lender,
your real estate agent may recommend one to you.
What documents &
information does lender need for a loan application?
The required list of documents and information may vary from lender to
lender and will depend in the circumstances of each borrower.
DOCUMENTS |
INFORMATION |
| 1. Most recent 2 years W-2 forms, (or 1099's if
S/E*) |
1. I.D. and Social Security #. |
| 2. Most recent 2 years filed Federal Tax Return, 1040's. |
2. Two-years of residence history. |
| 3. Most recent paycheck
stubs-Less than 30-days old. |
3. Two-years
employment history. |
| 4. Most recent 3-months bank statements. |
4. If renting, landlord
information. |
| 5. Year-to-date profit & loss statement & balance
sheet.* |
5. Real Estate owned information. |
| 6. Bankruptcy papers, discharge & all schedules (if
appl.) |
6. List of outstanding debts. |
| * Applicable, if self employed or commissions |
What is the difference
between fix and adjustable interest rate in a loan?
In a standard fix interest rate loan, interest rate remain fixed (does not
change) for the life of the loan. The most common ones are the 30-year fixed
loan and the 15-year fixed loan. There are some other loans where interest
is fixed for 3-years or 5-years or 7-years, after fixed period expired, new
loan-terms may apply.
For an adjustable interest rate, the interest rate changes certain
percentage once or twice a year or as agreed under the loan terms. Normally,
there is a cup in the interest rate, in other words, the interest rate will
not go higher after reaching certain percentage (Common
questions about Adjustable Rates)
What is the minimum down
payment to buy a home?
This figure varies and will depend in the type of loan, loan amount, and
sale terms. For example, a standard conventional-loan normally requires 20% down. On the other hand, a government secure loan (e.g., FHA-loan) a
first time buyer may buy with as little as 3% down up to certain loan
amount. Certain loan-products may allows borrowers to obtain 100% financing
without down payment. |
