De-Baffling the Borrowing Experience

We know you keep getting smarter and smarter about getting a home loan. But let’s face it; some of this mortgage stuff is really confusing.

Here are our 6 top tips to keep you from being baffled as you buy.

1. Closing Costs Do Add Up

We have extensive requirements to make sure you know about the mortgage closing costs, but they sometimes come as a huge surprise to borrowers when they see the bottom line. Make sure you ask questions about closing costs related to each home you are considering. When you receive the Loan Estimate, review it in detail.

2. Closing Delays Are Possible, But Avoidable

While some may lead you to believe that closing delays are the norm, there are only three types of changes that will require your lender to redo paperwork and could cause a slight delay in your closing. Those are:

• an increase in your rate above certain tolerance,
• the addition of a prepayment penalty,
• or a loan-product change such as a switch to an adjustable-rate loan from a fixed-rate product.

Avoid these changes and your closing should run on schedule as discussed with your real estate team.

3. Closing Costs Can Be Shared or Seller Responsibility

Often times when we talk closing costs with homebuyers they are under the false impression that only they can pay their closing costs. In reality, closing costs can be a seller concession or they can be shared. Ask Jane Mortgage questions during the negotiation phase. It may help you get some of these costs shared or pushed to the seller completely.

4. Compiling Verification Documents Can Be A Breeze

Gathering all the documents required by lenders to verify their ability to purchase and review their financial status sounds daunting to many borrowers. [mtgfirst] [mtglast] helps us know exactly what documents are needed. Another easy breezy way that some of our clients use is to authorize secure delivery of all their financial info by an accountant or other financial services provider.

5. Good Credit Way Better Than No Credit At All

When you’re looking to take out a loan, you may think that your lack of credit cards is a positive. Unfortunately for us when you’re trying to get that loan there is no debt-payment history to show that you are a good borrower who pays back your loans. We need that information when it comes time to qualify you.

6. Don’t Forget About Tax Breaks

We have also found that borrowers often think mortgage interest deductions are limited to their first, primary residence. But that’s not the only way to get a tax break. Second-home loans (in certain circumstances) and home equity lines of credit also are eligible.

We hope these 6 tips help you feel more knowledgeable and comfortable with getting a good loan for a good home. We’re here to help when you are ready and happy to answer your questions about these top 6 tips and much more!