Mortgage Information

Sharon Klaus

5500 Westown Parkway
Suite 120
West Des Moines, IA
50266

Office (515) 453-7493
Toll-free (800) 798-0348
Fax (515) 453-7770
Mobile (515)771-6352

sklaus@worldnet.att.net

Mortgage Information courtesy of Banker's Trust, Des Moines IA
Yvonne Silvers 515-222-2005 West Des Moines Office.

Here 's a list of a few of the real estate mortgage most often asked questions in the marketplace today:

1. What is the first step in the home buying process?

Choose a bank and loan originator that is knowledgeable about all programs, products, and underwriting standards. Make an appointment to discuss your financial situation and loan programs that will fit your needs. By obtaining credit approval first, any uncertainties you may have about your credit are addressed up-front. You will also have an idea on how much of a mortgage you can afford before starting your home search.

2. What amount of cash is typically needed for a down payment?

Traditionally, a 10% to 20% down payment is considered normal, but borrowers today can buy a home with as little as a 3% down payment. In addition, there are programs that allow for the borrower to receive a full gift for the down payment, and there are also 100% financing loans available.

3. What amount of closing costs can I expect to pay?

Typically, closing costs are about $1,200 plus a 1% origination fee. This fee is based on the mortgage amount. Many times these funds can be financed or paid by the seller.

4. How long will the home buying process take?

Most often 30-45 days is the standard time until closing. The actual approval process should not take more than 5-7 days. Most programs allow for streamlined documentation. If this documentation is obtained by the lender immediately, an approval can be almost instant.

5. What is PMI and how long will I have to pay it?

Private mortgage insurance protects the lender against default. Most lenders require PMI until the loan reaches 80% of the value of the home. PMI can be paid monthly or in a lump-sum.

6. A relative wants to buy me a home. How is this handled?

Most often this is looked at as a non-owner occupied loan that would require at least a 20% down payment. Often times you may find a lender who will require less than the 20%, if it is a relative buying for you or co-signing on the note with you.

7. What information will my lender need to preapprove my loan?

Your lender will need some detailed information from you to complete your application. Below is a list of the most commonly requested information:

W2s for the past 2 years. If self-employed, 2 years of complete tax returns and YTD Profit and Loss and Balance Sheet.

Most recent pay check stubs covering the last 30 days.

Residence addresses past 2 years.

Names and addresses of each employer past 2 years.

Last 3 months' bank statements for all checking and savings accounts.

Names, addresses, account numbers, and monthly payments on all open loans.

Addresses of other real estate owned, value, loan balance, and copy of current lease.

Landlord's names and addresses past 2 years.

8. What is the difference between a fixed rate and an adjustable rate mortgage (ARM)?

With a fixed rate loan, your interest rate and monthly principal and interest payment are fixed at the beginning of the loan and will remain the same throughout the entire term. An ARM allows the interest rate to go up or down over the term of the loan. Payment amounts may fluctuate with an ARM, and the decrease in loan balance will not be as predictable as a fixed rate mortgage.

9. What is the difference between Conventional, FHA, and VA Financing?

Conventional Financing refers to home loans that have not been insured by the FHA or guaranteed by the VA. These loans may require a larger down payment or require private mortgage insurance. Both fixed rate and adjustable loans are available with conventional financing.

FHA Financing means the Federal Housing Administration (FHA) has insured the repayment of the loan to the lender. Because there is less risk involved for the lender, a smaller down payment is often possible. Both fixed rate and adjustable rate loans are available with FHA financing.

VA Financing refers to home loans guaranteed by the Department of Veteran Affairs. On a primary residence, the guarantee by the VA reduces the risk to the lender, so that qualified veterans may obtain mortgages from an approved lender without a down payment.

There are many other loan options available that allow you to lower your down payment and closing costs. Yvonne Silvers from Bankers Trust can help you determine if you qualify for these loan options

If you have any questions about pre-qualifying for a loan, please call

Yvonne Silvers, Bankers Trust, West Des Moines

515-222-2005

Mortgage Calculators [Courtesty of Bankers Trust]

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