How do I get started on a home purchase?
In order to expedite the paperwork process, I recommend you gather the following items:
- Most recent paystubs for one month.
- W2s from the last two years.
- Signed copies of your last two years’ tax returns, including all schedules that were filed.
- If you are self-employed, a year-to-date profit and loss statement.
- Homeowner’s insurance company name and number.
- Most recent bank statements for two months.
- Most recent statements from any retirement and investment accounts for two months.
What costs are involved?
Within 3 days of your application, your Loan Officer is required by law to provide you with a good faith estimate of closing costs, a truth in lending form disclosing your APR (annual percentage rate) along with other state and federal disclosures. This is important because you will need sufficent assests for your down payment and closing costs as well. This is a brief rundown of some of the fees that could be associated with your new mortgage:
- Application/Processing Fee – Charged by the loan officer to process your loan application.
- Appraisal Fee – Charged by the appraiser to determine the current value of the property.
- Closing Fee – Charged by the closing agency (escrow, attorney, title) to ensure the close of your transaction.
- Credit Report Fee – Charged by the credit reporting agency to provide your credit report to your loan officer and/or lender.
- Title Search/Title Insurance Fees – Charged by the title company to ensure the property is free from liens or title defects.
- Origination Fee – Paid to the originator to obtain a lower interest rate. This is usually expressed in the form of points. One point equals 1% of the loan amount.
- Discount Points – Paid to the lender to secure a lower interest rate.
- Miscellaneous Fees – VA and FHA loans may have other fees associated with them. Private Mortgage Insurance (PMI), document preparation, notary, recording and tax service are other fees which may fall under this category.
Always work with a local professional loan officer who and help you evaluate your personal situation and assist you in finding the loan program that works best to meet your individual goals and needs.