A prequalification letter comes from the lender. The letter states that the lender agrees to provide a mortgage to you, the homebuyer, under certain conditions. Prequalification letters help you set realistic goals while you're house hunting. Additionally, they can provide you with the same negotiating ability as a cash buyer and enable you to move quickly once you find the perfect home.
Absolutely. If your credit score and finances are already in order prior to your house hunt, the process goes much smoother. The prequalification process is simple:
*All loans subject to credit approval. A prequalification is not an approval of credit, and does not signify that underwriting requirements have been met. Conditions and restrictions may apply.
*Pursuant to Federal law, a lender shall not require a borrower to provide such documentation prior to issuing a Loan Estimate. However, you may voluntarily provide documentation to us for consideration. Your loan officer can provide you with a list of documents that are helpful to a lender when pre-qualifying a borrower.
When you waive escrows, you take the responsibility of paying your taxes and insurance rather than having them included in your monthly payment. Waiving escrows may add a fee to your closing costs. You can only waive escrows if your loan program allows for this.
The lender requires a home appraisal on most transactions. If the appraiser recommends repairs or if repairs are mentioned in the contract, the lender may require that those repairs be completed before closing. The appraiser then will perform a final inspection to ensure that the repairs were completed.
To find your loan-to-value (LTV) ratio, simply divide your current loan amount by the total value of your home. For example, if your home is worth $220,000 and you owe $160,000, your LTV is 73%.
PITI stands for principal, interest, taxes and insurance. These are the basic components of a monthly mortgage payment if escrows (the taxes and insurance part) are being included.
Summit Funding has a wide array of loan options, including these below:
Your lifestyle and financial situation are the best guides for deciding on the best loan program for you. Consider these questions:
Based on your answers, we can discuss different home loan programs that will suit you financially and help you reach life's milestones.
We will advise you of the rates available for your loan product and when you are ready, we can lock in your interest rate.
Your interest rate can stay locked in for up to 180 days (additional restrictions and fees may apply for lock terms in excess of 90 days). This guarantees your rate for the entire lock period.
Paying origination discount points allows you to lock in a lower interest rate.
Typically, origination points are applied and disclosed at the time of locking in an interest rate. On the other hand, discount points can be added at the time of lock or later in the process if you choose to pay to reduce your interest rate.
Origination fees are the fees required to originate the loan. They can include processing fees, underwriting fees, administrative fees, and several others. We can give you a complete breakdown of these fees as they vary from state to state.
A lender may charge a pre-payment penalty if the borrower decides to pay off the home loan early. Some loans with lower rates contain a pre-payment penalty, which discourages refinancing if interest rates fall. This ultimately benefits the lender with a higher rate of return on the loan. Although home loans are structured in various ways, a pre-payment penalty is typically a percentage of the unpaid balance or the amount of interest on a specified number of months.