PURCHASING | Pmgro

Purchasing

When purchasing a house to either live in or to use it as an investment, there are many types of loans that you can qualify for. This all depends on your scenerio.

Below you will find helpful information about 1) some of the different types of loans that are offered, 2) why people should pre-qualify before looking for their home or investment, and finally 3) a brief overview of the loan process.

TYPES OF LOANS

Adjustable Rate Mortgage (ARM): ARMs have an interest rate that is adjusted at certain intervals based on a speific index during the life of the loan.

Ballon Payment Loan: A Ballon Payment is a fixed rate loan that is amortized over 30 years but becomes due and payable at the end of a certain term. May be extendible or may roll-over into another type of loan.

Buy-Down Loan: Buy-Down loans are fixed rate loans where the interest rate and the payment are reduced for a specific period of time by paying the interest up front to subsidize the lower payment.

Conventioal Loan: Conventional loans are sometimes more lenient with the apprasial and condition of the property. When you are buying a "fixer upper", you may need to use a conventional loan. Homes purchasing above the FHA loan limit are usually financed with conventional loans.

FHA Loan: FHA loans are insured by the Federal Housing Administration under H.U.D. They offer a low down payment and are easier to qualify for than conventional loans.

Fixed Rate Loan: A fixed rate loan has one interest rate that remains the same throughout the life of the loan.

Graduated Payment Mortgage: A Graduated Payment Mortgage is a fixed rate loan that has payments starting lower than a standard fixed rate loan. It then increases by a predetermined amount each year for a set number of years.

VA loan: VA loans are guaranteed by the Veterans Administration. A veteran must have served 180 days of active service.

We offer many other loan programs. Call us and find out which one is best for your scenerio

(626) 583-1020

REASONS TO GET PRE-QUALIFIED

Before selecting a house to purchase, you should consider getting pre-qualified. This will allow you to have the best information about the price range you can afford.

With pre-qualification, you can determine which loan program best fits your need and which programs you qualify for.

You will also know exactly how much you are qualified for. It is not fun when you find your ideal home and then find out you cannot afford it.

After being pre-qualified, you monthly payment will be estimated. This will allow you to budget your money before making this large investment.

It'll show you what the down payment and the estimated closing costs will be.

If you are a first-time buyer, you may be able to qualify for a special first-time buyer program.

If you feel you would like and can afford a higher mortgage payment but are not able to meet qualification, co-mortgagor financing may be made available to you.

THE LOAN PROCESS

PREQUALIFICATION / INTERVIEW

This consists of filling out the 1003, which is the loan application and gathering some financial information by providing documentation such as your federal income taxes for the last 2 years (1040), pay-stubs, W-2s, 1099s, bank account statements, etc. In the interview we analyze your scenerio and determine what loan programs you qualify for and what best suits you.

ORDER DOCUMENTS

We then order documents such as a credit report, appraisal on the subject property, verifications of employment, preliminary report, etc.

LOAN SUBMISSION

The loan package is then assembled and submitted to the underwriter for approval.

DOCUMENTATION

After the package has been submitted, lender will check for any problems or documents that are missing and will request for any additional documentation that is needed.

LOAN APPROVAL

Parties are notified of whether or not they have been approved.

DOCUMENTS ARE DRAWN

The next step after there is confirmation that the loan has been approved is to send the complete documents to escrow.

FUNDING

Lender then reviews the loan package and funds are transferred by wire

RECORDING OF DOCUMENTS

Lastly, the title company records the deed of trust at the county recorder's office and escrow is then officially closed.