Choosing the Right Loan

Most home shoppers do not buy the first home they preview. They look at several homes and compare. Most often prospective buyers are looking at these houses with a real estate agent that’s helping them gather and analyze a lot of information. A mortgage loan should be no different.

So often a person expends tremendous energy finding the "right home" and then the mortgage process is an afterthought. With literally hundreds of loan options available, it is important that you choose your mortgage advisor wisely. Just like the wrong house could be costly for you, the wrong mortgage program could cost you tens of thousands of dollars over a 30-year period. Finding a mortgage professional that knows the programs available and knows how to find out which one fits your needs and goals is a vital part of your mortgage selection.

Mortgages come in all shapes and sizes… but one of the most basic concerns is Fixed Rate or an ARM.

• Fixed rate loans. These loans have a set interest rate that will not change. These loans range from 10 to 40 years in duration.
• Adjustable Rate Mortgages. These too can range up to a term of 40 years. They have a fixed rate period followed by an adjustment period. While the fixed period could be as little as one month, the most popular lengths are 2, 3, 5, or 7 years.

HOW DO YOU DECIDE WHICH OF THESE WORKS FOR YOU? Ask yourself these questions:

How long will I live in this house?

What are my financial goals? I.E… Lowest payment, lowest downpayment, etc…

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Mortgage Programs

There are basically two reasons you may wish to obtain a first mortgage: to make a home purchase or to refinance an already owned property. Inside these two categories is a wealth of variations addressing most every scenario possible. You may not realize it but the mortgage opportunities are so great that many people can now buy houses they could not otherwise afford due to the unique products currently offered. You also probably did not know that the lifespan of an average mortgage loan in the Triangle area is now less than 5 years.

This is due in part to homeowners "moving up" or "moving down," dependent upon their goals.

First Time Homebuyers
There are numerous programs that are designed to help individuals become homeowners for the first time. While they generally do not require that the borrower be a first-time homeowner, the parameters are geared toward first timers. Several of these loan programs require a zero down payment.

Vacation/Investment Properties
We can offer programs that allow as little as zero down payment on vacation and investment properties (the largest deciding factor in the amount of a down payment is a borrower’s credit score). Fixed rate loans, ARMs and even balloon programs are available, giving many choices to make payments affordable. History has taught us that real estate is one of the safest and best uses of your excess funds to generate a higher rate of return on your money. We can assist you with properties as large as four units.

Refinances
There are two categories of refinances: rate/term refinances and cash-out refinances. Whether it is to reduce the time remaining, reduce your monthly housing payment or to get equity out for any reason, refinancing has become a valuable tool to manage your financial resources.

Second Mortgages
Many people confuse themselves trying to understand the term second mortgage, or equity line, or home equity loan. Very simply, a second mortgage is just that – it is a second loan tied to your home. There are fixed rate loans, equity lines of credit, interest only loans, and many other types but they are all called the same thing: a second mortgage. We offer equity lines at no additional charge if it closes in conjunction with a first mortgage transaction. Sometimes the loans can be set up to maximize your financial picture. Maybe you want to avoid private mortgage insurance (PMI) OR you're selling another home and want to pay a large amount down in the near future OR possibly you're attempting to keep your new loan balance under the "jumbo" limits. Together, we can explore a myriad of different programs and scenarios to ensure you're getting the right loan that meets your needs.

 

What We Need

In an effort to process, approve, and close your loan as quickly as possible, please provide the following items (as they apply to you) as soon as you can.

1. Clear copies of the last 30 days of pay stubs. For self-employed borrowers – we need complete copies of the last 2 years federal returns, all pages. If you have an S-corp, we need those also.
2. Clear copies of the last two years W2’s.
3. All pages of the last 3 month’s Bank Statements, 401K Accounts, Stocks, IRA’s or Bonds
4. Clear copy of each borrowers drivers license (Patriot Act)
5. Completed application which you may print from this website.

A check in the amount of $425 made payable to Alera Financial. This covers the appraisal and credit report(s). Since these items are done prior to closing and must be paid for. We need to collect this money in advance. If an appraisal is not ordered, these funds will be refunded to you.

1. Copy of purchase contract. If you selling your present home, we will need a copy of that contract as well.
2. Copy of cancelled earnest money check(s)
3. Name of your home owners insurance agent/company with their contact information

If a refinance…

1. Copy of most recent home insurance declarations page, showing agent, phone number, and policy dates.
2. If you are refinancing an FHA loan, we will need a copy of your signed Note and HUD-1 from your previous closing.
3. If you own investment/rental properties, we may need copies of the leases and/or copies of the last 2 federal tax returns.   

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Prequalification

We will be happy to do a pre-qualification for you and determine what your maximum limits are. We do like to set a meeting (in our office or over the phone) so we can discuss goals/needs early on in your home buying process.

It is very important to get pre-qualified early in the home search process; actually it is best to do this before you begin home shopping. Most REALTORS and nearly all sellers want proof that your finances have been reviewed by a qualified mortgage professional to be sure you are financially capable of buying a home.

With an application and a pay stub, we can review your credit and issue you a pre-qualification letter. This can usually be done in less than one hour. While it is not a firm commitment, it lets all parties involved know that you are serious and you are qualified.