Tagged: purchasing a home

FHA Home Loan Program Overview for Marlboro, NJ Buyers

FHA Home Loan Program Overview for Marlboro, NJ Buyers

FHA Home Loan Program Overview for Marlboro, NJ Buyers…  FHA is a home loan program where private mortgage insurance is provided by the Federal government. Most major mortgage companies offer it. Although the program is often used by first time home buyers, it is not restricted to them. This blog provides FHA Home Loan Program Overview for Marlboro, NJ Buyers and pre-approval guidance to help you decide whether it is a home loan program that you should consider.

Benefits Of FHA Loans

There are a few important benefits of FHA loans. The lowest down payment for FHA mortgages is 3%, which satisfies home buyers who do not have a 20% down payment. They also allow home buyers to receive funds for down payment and closing costs as a gift from a family member. Another benefit is the streamlined refinancing option. It allows a refinance to a lower rate without needing a new appraisal, which is useful if mortgage rates and home values both drop. The mortgages are also assumable, meaning that a buyer may take over the loan at the existing interest rate. This can help when interest rates rise. Lastly, FHA does not penalize buyers for credit rankings. Although buyers must still maintain satisfactory credit, below average scores will not lead to higher interest rates.

Downsides Of FHA Financing

There are downsides of FHA financing to keep in mind. The mortgage insurance (MI) is typically more than a conventional loan. There is an up-front large fee and a recurring fee due with each payment until the balance is paid down below 80% of the purchase price (or updated appraised value). For condominium units, the condo complex must meet certain requirements such as minimum reserves and minimum owner occupancy rates. Converted multi-family buildings and duplexes are therefore difficult to get approved. Single family homes must also meet certain criteria geared towards safety concerns.

FHA Pre-approval Guidance

Prior to applying for a pre-approval, pull your credit report and address any mistakes. Also obtain important financial paperwork such as bank statements, tax returns from past years, recent pay stubs, and investment account statements. Underwriters will typically ask for these items. Ask a loan officer to obtain potential monthly payments (based on a particular home price and your financial qualifications) and closing costs before getting too far in the process.

FHA Home Loan Program Overview for Marlboro, NJ Buyers

FHA makes purchasing a home easier for some home buyers who may otherwise not be able to get a loan. It may also make refinancing or selling a property easier in the future. However, it does have higher fees and property-specific requirements, so not everyone is able to or may want to use an FHA home loan program. Speak with an FHA loan professional to better evaluate this option. Contact me at  732-319-1340 or by email at sbhaskara@optonline.net if you would like more information. I would be happy to help! To begin your home search in Marlboro, NJ, please visit Best in NJ Real Estate – Marlboro, NJ Homes for Sale.

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Steps In The Mortgage Process For Purchasing Marlboro, NJ Homes

Steps In The Mortgage Process For Purchasing Marlboro, NJ HomesThere are many distinct steps in the real estate buying process, and many relate to the mortgage. It can be confusing for both new and experienced buyers. This blog provides important details about steps in the mortgage process for purchasing Marlboro NJ homes and covers what you may want to know prior to beginning the process.

Steps In The Mortgage Process For Purchasing Marlboro NJ Homes

Pre-approval

A pre-approval is an introductory review of your finances and credit history to estimate what you may be able to receive as a loan amount. It verifies that you meet the preliminary criteria for financing. Pre-approvals are not a guarantee that you will be able to obtain financing, but is a typical first step in the mortgage process.

Formal Application

An application occurs usually after you have an accepted offer on a home. You may be asked for additional financial paperwork and information. The details on the home are also submitted to the mortgage company for review. They will request a copy of the Purchase and Sales agreement in order to proceed. Your contract will typically specify that you submit an application before a specific date.

Mortgage Appraisal

An appraisal is ordered by a lender (although buyers are in most cases charged the fee for it) to identify the current market value of the property. Appraisers will compare your property to others that recently sold in the area within the last several months. An exact dollar amount is generated. Ultimately, the value of the real estate must satisfy the loan amount.

Commitment Letter

After your financial information and the details on the property are analyzed, the mortgage company issues a commitment letter. This assures the parties that no major problems have been identified and that the mortgage company is somewhat certain that the mortgage will obtain approval. There can be a few conditions included in the letter such as an employment verification and additional credit check. Therefore, it is essential not to complete costly purchases or alter your financial situation even after a commitment is issued as it may lead to last minute issues.

Clear to Close

A clear to close is basically the final approval of a loan. It verifies that all requirements have been satisfied and that the mortgage company can release the information to the closing agent. This sometimes takes place within days or hours before the anticipated closing date.

Settlement

The settlement includes signing of documentation and filing of paperwork into public record. Be sure to bring acceptable identification and a money order or bank check for any monies you are paying. Personal checks or cash are traditionally not acceptable. The transfer of funds takes place at or shortly after and the real estate will be officially yours!

A Few More Tips

Deadlines are an important factor of any real estate transfer, so make sure that you know the deadlines and what you must perform to satisfy each one. Getting representation from a experienced mortgage consultant and real estate broker is very important. They can offer advice and assistance, monitor deadlines, and ensure a more positive experience. As a local real estate consultant, I will offer representation during the mortgage and overall home purchase process. You may reach me, Sujatha Bhaskara, at Keller Williams Realty via phone at 732-536-9010 or email at sbhaskara@optonline.net. To begin your home search in Marlboro, NJ, please visit Best in NJ Real Estate – Marlboro, NJ Homes for Sale.