FINANCING YOUR HOME IN MARYLAND AND VIRGINIA
Real Estate in Maryland and Virginia Starts With a
Good Realtor and a Good Lender

Lenders are our good friends. They lend us large sums of money and help us buy wonderful homes. But, if you've never financed a real estate, the lending process may be intimidating. You have to give the lender your most personal financial information. Not to worry, our agents are very experienced with home loans and will help you every step of the way. We try to help our buyers become educated consumers and the loan process is where our buyers have a lot of questions. Some questions we get on a regular basis and answers are below. Contact us at 800-711-7988 or Email Homefinders.com if you still need information. We can help.

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DOES THE MORTGAGE COMPANY OWN MY HOUSE UNTIL I PAY OFF THE LOAN?

HOW DO I KNOW WHAT KIND OF LOAN TO APPLY FOR?

WHAT EXACTLY IS A POINT?

EVERYONE SAYS I SHOULD GET A 30 YEAR FIXED RATE LOAN, IS THAT RIGHT?

SHOULDN'T I GET PRE-APPROVED FOR A LOAN BEFORE LOOKING FOR A HOME?

WHAT KIND OF DOCUMENTATION WILL I NEED TO MAKE A LOAN APPLICATION?

DOES THE MORTGAGE COMPANY OWN MY HOUSE UNTIL I PAY OFF THE LOAN?
No. You are the owner of record of the real estate you purchase. The mortgage company or bank has a lien on the title until the lien is paid off. You are always the owner.

HOW DO I KNOW WHAT KIND OF LOAN TO APPLY FOR?
Most real estate falls into one type of loan or another based on: (1) how much you need to borrow (2) if you are eligible for a Veterans Administration guaranteed loan (3) the amount of down payment you have. Following are descriptions of loan types.

FHA - These loans are insured by the Federal Housing Administration and permit buyers to finance some of their closing costs, thereby reducing the amount of cash that you need to buy. This loan is very popular for first time home buyers. Anyone can use the FHA loans. FHA loans are very popular with first time home buyers.

VA - These loans are guaranteed by the Department of Veterans Affairs. Only active duty and military veterans or widow(er)s can use this loan. This loan requires no down payment and the seller can pay up to 100% of the buyer's closing costs. The VA mortgage loan is the best loan on the market but limited to eligible borrowers.

CONVENTIONAL CONFORMING - These loans conform to the Fannie Mae guidelines for eligibility, meaning that, on average, the buyers may devote up to 28% of their before tax income to housing. These loans require a down payment of at least 5%. You can also obtain 100% financing with conventional loans. In exchange for a slightly higher interest rate, the lender will lend you money with no down payment and will even pay your closing costs. The higher interest rates are deductible and are often a good buy for folks with good income, good credit and little cash.

JUMBO LOANS - We work with lenders who specialize in the Jumbo or Portfolio loans for special people like you who are in the luxury home market. You will not have to lift a finger. Our lenders will communicate and process your loan by electronic means or, if you are local, will meet with you at your convenience in your office or home. Loans up to over several million are available and special long lock loans, up to 9 months, are also available. This may be important if you decide to build and it appears that rates may be on the increase. We follow loan programs with long term locks, float-down features, short term locks, fixed, ARMs, no documentation or low documentation loans, or any type that is best for you.

GET A FREE PRE-QUALIFICATION WITH A MAJOR LENDER.
Our agents work with loan officers who will gladly provide you with a pre-qualification letter to use when presenting a contract. You are under no obligation to use these lenders, but the rates are good and service is excellent.

WHAT EXACTLY IS A POINT?
Points are pre-paid interest. When a lender quotes a interest rate, they will quote one rate for a loan with no points, or pre-payment, and a lower interest rate if you pay points. Each point is one percent (1%) of the loan amount. It's that simple. You pay points to reduce the interest rate on your loan.

EVERYONE SAYS I SHOULD GET A 30 YEAR FIXED RATE LOAN, IS THAT RIGHT?
Depends. 30 year fixed is expensive money to borrow. If you believe you're going to be in a home 10-15 years or more, then the 30 year fixed loan is fine. Most home buyers feel secure and comfortable with a 30 year fixed rate loan. However, lenders charge a higher interest rate for long term (30 years) financing. You can save a lot of money over the years with a loan that is fixed for 3, 5, 7 or 10 years. If you plan to be in the home you are buying for less than 7-10 years, you should consider a shorter term loan and save thousands of dollars in interest. These loans have payments that are fixed for 3, 5, 7, or 10 years, but the payments are still amortized for a 30 year period, which keeps the payments at it's lowest amount.

SHOULDN'T I GET PRE-APPROVED FOR A LOAN BEFORE LOOKING FOR A HOME?
No. We believe you should keep your loan options open until you find the home you want to purchase. Otherwise, you may feel obligated to a particular lender or loan type that may not be appropriate for the type or price range home you wish to buy. Often you can get better terms and rates with a builder's lender if you are buying a new home. Also, it's good to shop loans before committing to a lender. We do recommend that you get pre-qualified by a lender and we will help you do that at no cost or obligation to you.

WHAT KIND OF DOCUMENTATION WILL I NEED TO MAKE A LOAN APPLICATION?
Generally, the documents needed will verify your income and debt. The list below is the minimum for VA, FHA and conventional loans.

Past two years W-2 Forms
Current address
Employment addresses
Recent bank statements
Name and address of current creditors
Social Security numbers
Certificate of Eligibility for VA buyers

If you are self employed, you will need two years tax returns and a profit and loss statement, simplified.

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