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Buying a Home - Mortgage Application - First Financial Bank

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					 Buying a Home:
Your Guide to Getting Started
                                                                  Introduction
                                                                       Introduction


                                  Key Contact Information

Realtor/Builder ________________________________________   Phone Number ___________________________

Mortgage Loan Officer _________________________________    Phone Number ___________________________

Title Company ________________________________________     Phone Number ___________________________

Insurance Agent _______________________________________    Phone Number ___________________________




                                        Homes Viewed

House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________


House _____________________________________    Address _____________________________________________




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                                                                                   What Loan Is
                                                                                  Right For Me?

When you purchase a new home, it means the beginning of a long relationship with your mortgage provider.
That’s why choosing the right lender is key to your long-term success. You should not only look for a lender
that offers competitive rates, but one you can count on for all of your financial needs.

Mortgage Loan Options
Whether you’re a first-time home buyer, you want to take the next step into a larger home or you’re looking to
refinance, there are many types of mortgage loans to consider. First Financial can help guide you through the
process to choose the right type of loan for your situation.

         Fixed-Rate Mortgage
         A fixed-rate mortgage loan’s interest rate remains the same for the entire term of the loan. With this
         type of loan, you have the opportunity to lock in a low interest rate with the security of consistent
         payments each month.

         Adjustable-Rate Mortgage
         When you finance with an adjustable-rate mortgage (ARM) loan, you get the advantage of the lowest
         possible principal and interest payment. If you don’t plan to be in your home for an extended period
         of time or if you expect to refinance in a couple of years, an ARM loan can be a terrific choice for you.

         CHAMP
         A Community Housing Affordable Mortgage Program (CHAMP) loan provides aggressive loan-to-
         value options for one-and two-unit properties. Advantages include underwriting flexibilities, no
         mortgage insurance, allowing non-traditional credit and the use of gifts to assist with down payment
         and/or closing costs.

         FHA Loan
         An FHA loan is a loan that is insured by the Federal Housing Agency. FHA loans offer low down
         payments, competitive rates and have flexible qualifying guidelines.

         VA Home Loan
         A VA loan is a mortgage program insured by the U.S. Department of Veteran Affairs and is designed
         to provide home financing for veterans and their families.

         Jumbo Mortgage Loan
         A jumbo mortgage loan is a loan option that is above the conventional conforming purchase limits
         currently set at $417,000.

         OHFA Loan
         The Ohio Housing Finance Agency (OHFA) makes affordable housing opportunities available to low-
         to-moderate-income Ohioans, including first-time home buyers, renters, senior citizens and other
         populations with special needs.



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                                                                                      What Loan Is
                                                                                     Right For Me?

          USDA Loan
          The United States Department of Agriculture (USDA) offers a wide variety of loans to help low-income
          individuals or families purchase, repair or build their home in rural areas.

          Welcome Home Program
          The Welcome Home Program is a federal program to help home buyers on the path to home
          ownership. Under the program, new home buyers can apply for up to $4,000 to fund reasonable
          down payments and closing costs.

Choosing the Right Mortgage Loan For You
Ultimately, it’s important to have a clear picture of your financial situation to determine what you can afford.

Consider a fixed-rate mortgage if:

     •	   You enjoy the comfort of knowing your payments will not change.
     •	   You expect interest rates to rise while you are in your home.
     •	   Your income is fixed.
     •	   You expect to stay in your home for an extended period.

Consider an adjustable-rate mortgage if:

     •	   You want a lower initial house payment.
     •	   You expect interest rates to remain stable or decline while you are in the home.
     •	   Your income is flexible.
     •	   You don’t expect to stay in your home for an extended period of time.
     •	   You expect to refinance your home in a couple of years.




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                                                                                What’s The
                                                                         Mortgage Process?

Pre-Qualification Program
In many cases, First Financial Bank can pre-qualify you for a mortgage loan before you even begin looking for
a home! Pre-qualification gives you security and peace of mind, as well as the purchasing leverage you need to
help find the home that’s right for you.

Pre-qualification is quick and easy—in fact, it can take as little as 30 minutes when you have the right
information. Make sure you bring the following:

     •	   Residence history
     •	   Employment history
     •	   Current income, including salary, commission or bonus
     •	   Assets
     •	   Social Security numbers
     •	   Confirmation of all debts, including credit cards and loans
     •	   Information on any other property owned

The Financing Process
The home financing process can be daunting if you’re not sure where to start. At First Financial, we’re
committed to helping you every step of the way:

     1. You will complete a loan application.
     2. First Financial begins processing the application.
     3. First Financial requests an appraisal of the home, a credit report and verification of employment and
        assets, such as bank accounts.
     4. First Financial will provide a booklet containing specific loan information and a good faith estimate of
        all closing and related costs.
     5. An estimate of your loan costs, in the form of an Initial Truth in Lending Disclosure Statement (Reg. Z)
        is issued.
     6. First Financial evaluates the application, along with supporting documentation, and renders its
        decision.
     7. You and your realtor will coordinate signing of closing documents with the settlement agency.
     8. Recordation of the closing documents.
     9. Seller is paid and title to the home is yours. First Financial places a mortgage as a security against the
        title.




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                                                                               What Do I Need
                                                                                     To Bring?

Items Required from Applicant(s) at Time of Application
When you’ve found the right home, you’re ready to take the next step and complete the full loan application.
Keep the following items on-hand:

         Legible sales contract, fully executed by buyers and sellers
         Application fee
         Social Security numbers of all applicants
         Driver’s license(s) or state identification card(s)

     Income:

         Name and address of all employers for the past two years
         Position and length of time on each job
         Current rate of base earnings and average of overtime, commissions, bonuses, etc.
         Copies of W-2 forms for the past two years
         Copy of two most recent pay stubs
         If self-employed, past two years of personal Federal Income Tax Returns, including all support
         schedules, along with Year-To-Date profit and loss statement, and if applicable, past two years’
         complete Partnership (including K-1s) or Corporation Federal Income Tax Returns and Financial
         Statements

     Obligations:

         Name and address of creditors on all open accounts
         Current account balances
         Monthly payments
         Account numbers
         If child support and/or alimony payments are made, copy of recorded Separation Agreement and
         Divorce Decree
     Assets:
         Name and address of bank. Indicate type of account, along with account number(s) and current
         balance.
         Copy of most recent statement(s) or passbook/certificate/stock.
         Provide documentation for any additional sources of funds (i.e., gift, letter, savings bonds).




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                                                                                                            How Much Can
                                                                                                              You Afford?

How Much Can You Afford?
Before you begin house hunting, it’s important to have a clear picture of your financial situation to determine
what you can afford. Start by reviewing your monthly budget and expenses and meet with a mortgage loan
officer to determine the right options for your financial situation.

The chart below shows a variety of monthly mortgage payment levels. The numbers shown are based on a
30-year fixed-rate mortgage. Keep in mind that payments associated with a 15-year mortgage will be higher,
but you will be able to pay off the mortgage faster and will pay less interest over the life of the mortgage.


    Monthly Mortgage Payments at Different Interest Rates (30-year fixed-rate mortgage) *

    Mortgage
                              4%                   4.5%                   5%                   5.5%                   6%                  6.5%
    Amounts
     $100,000               $477.42              $506.69               $536.82               $567.79               $599.55               $632.07
     $150,000               $716.12              $760.03               $805.23               $851.68               $899.33               $948.10
     $200,000               $954.83              $1013.37             $1073.64              $1135.58              $1199.10              $1264.14
     $300,000              $1432.25              $1520.06             $1610.46              $1703.37              $1798.65              $1896.20
     $400,000              $1909.66              $2026.74             $2147.29              $2271.16              $2398.20              $2528.27
     $500,000              $2387.08              $2533.43             $2684.11              $2838.95              $2997.75              $3160.34
*Escrows for taxes and insurance and mortgage insurance are not included. If you are looking at mortgages of different levels, you can use the chart to
estimate or use a mortgage payment calculator available at www.bankatfirst.com.


It’s important to know mortgage interest rates are also subject to change on a daily basis. Interest rates are
affected by a number of factors, including inflation, economic growth, and Federal Reserve policy. The Federal
Reserve designs and implements policies to keep inflation and interest rates relatively low and stable.
However, you can lock in a rate during the mortgage application process. This means that First Financial will
stand by the rate through a specified expiration date.




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                                                                              Frequently Asked
                                                                                    Questions

Frequently Asked Questions
1.   How much will closing costs be? How are they determined?
     Closing costs vary based on a number of factors. Closing costs include your out-of-pocket costs, pre-paid
     expenses, application fees, title insurance, origination fees and discount points. First Financial Bank will
     give you an estimate of closing costs upon completion of your loan application. Please note that closing
     costs do not include your down payment.

2.   How are mortgage interest rates determined?
     Interest rates are affected by a number of factors, including inflation, economic growth and Federal
     Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate
     of inflation will usually lead to low interest rates, while concerns about rising inflation normally result in
     increased interest rates. The Federal Reserve designs and implements policies to keep inflation and
     interest rates relatively low and stable.

3.   Will the rates quoted to me today be the same tomorrow?
     No, as economic reports, inflation and Federal Reserve policy continually fluctuate, mortgage interest
     rates are also subject to change on a daily basis. When purchasing a home, the rate can be locked in once
     a borrower has an accepted contract and a property address.

     When refinancing, you can lock in a rate at the time of application with an application fee. This means that
     First Financial will stand by and honor the rate you lock through a specified expiration date for that locked
     rate.

4.   Is comparing APRs the best way to decide which lender has the lowest rates and fees?
     Yes, the annual percentage rate (APR) is the full cost of the loan, including interest and fees, expressed as
     a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage,
     because it includes points and other credit costs, such as private mortgage insurance, loan discount and
     origination fees. The APR is calculated the same way at all mortgage lenders, giving home buyers the
     ability to compare various mortgage loan products based on the annual cost for each loan.

5.   Are there any pre-payment penalties charged for these mortgage loan programs?
     No, there are no pre-payment penalties on any of our home mortgage loans.

6.   How long will it take to process my loan? When can I expect to close?
     When purchasing a home, the process will usually take up to 30 days. When refinancing, the process
     usually takes 45 days. Please note that this time estimate is based on your ability to provide the necessary
     documentation on a timely basis in order for us to continue the process.




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                                                                               Frequently Asked
                                                                                     Questions

7.   How will my credit score affect my application?
     Your credit score will be used to evaluate your application. Credit scores used for mortgage loan decisions
     range from approximately 300 to 900. Using credit scores to evaluate your history lets us quickly and
     objectively evaluate your credit history when reviewing your loan application. However, your credit score is
     just one of the many factors considered when making a loan decision, and we evaluate an application by
     looking at the total financial picture of a client.

8.   Will a credit inquiry affect my credit score?
     Any time your credit report is pulled—including when you order a copy of your credit report directly from
     a credit reporting agency—an inquiry is added to your report. Numerous credit inquiries can sometimes
     affect your score, since it may indicate that your credit use is increasing. But, don’t fear! Your credit score
     ignores all mortgage loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30
     days, the inquiries won’t affect your score while you may be rate shopping.

9. I’m retired and my income is from pension or Social Security. How will you verify my income?
     We will ask for copies of your recent pension check stubs, or a bank statement if your pension is deposited
     directly into your account. It may be necessary to verify that this income will continue for at least three
     years. This can usually be verified with a copy of your award letter. If you don’t have an award letter, we can
     contact the source of this income directly for verification.

     If you’re receiving tax-free income (ex: Social Security), we’ll consider the fact that taxes will not be
     deducted from this income when reviewing your request.

10. I have income from dividends and/or interest. How will you verify my income?
     Two years of personal tax returns are required to verify the amount of your dividend and/or interest
     income so an average amount can be calculated. In addition, we’ll need to verify your ownership of the
     assets that generate the income, using copies of statements from your financial institution, brokerage
     statements, stock certificates or promissory notes.

11. I own rental properties. How will you verify my income?
     We’ll ask for the most recent year’s federal tax return to verify your rental income. We’ll review the
     Schedule E of the tax return to verify your rental income, after all expenses (minus depreciation). Since
     depreciation is a paper loss, it won’t be counted against your rental income. If you have not owned the
     rental property for a complete tax year, we’ll ask for a copy of any leases you have executed and we will
     estimate the expenses of ownership.

12. What information do I have to provide about my child support, alimony or separate maintenance
    income?
     Information about child support, alimony or separate maintenance income does not need to be provided
     unless you wish to have it considered for repaying your mortgage loan.



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                                                                              Frequently Asked
                                                                                    Questions

13. Will my overtime, commission or bonus income be considered when evaluating my application?
    In order for bonus, overtime or commission income to be considered, you must have a history of
    receiving it and it must be deemed likely to continue. We typically request copies of W-2 statements
    from the previous two years and a recent pay stub to verify this income. If a major part of your income is
    commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-
    related expenses, if any. We’ll average the amounts you have received over the past two years to calculate
    the amount that can be considered as a regular part of your income. If you haven’t been receiving bonus,
    overtime or commission income for at least one year, it likely cannot be given full value when your loan is
    reviewed for approval.

14. I’m selling my current home to purchase my new home. What documents will you need?
    If you are selling your current home to purchase your new home, we will need a copy of the settlement or
    the closing statement you will receive at the closing of your current home. This will provide the verification
    that proves your current mortgage has been paid in full and you’ll have sufficient funds to close on your
    new home. Often, the closing of your current home is scheduled for the same day as the closing of your
    new home. Verification of prior home sale would need to be provided and reviewed before your new loan
    closing.

15. Will a past bankruptcy or foreclosure affect my ability to obtain a new mortgage?
    If you’ve had a past bankruptcy or foreclosure, it may affect your ability to get a new mortgage. Unless the
    bankruptcy or foreclosure was caused by situations beyond your control, we will generally require that two
    to four years have passed since the bankruptcy or foreclosure.

16. Is a gift an acceptable source of down payment? Can I borrow funds to use toward my
    down payment?
    Gifts are an acceptable source of down payment, provided the gift giver is related to you or your co-
    borrower. We’ll ask you for the name, address and phone number of the gift giver, as well as the giver’s
    relationship to you. If your loan request is more than 80 percent of the purchase price, we’ll need to verify
    that you have at least 5 percent of the property’s value in your own assets. Prior to closing, we’ll verify that
    the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to
    verify that you have deposited the gift funds into your account.

17. Will my loan be sold to another company?
    First Financial reserves the right to sell its mortgage loans to other companies. It is possible that your
    loan will be sold, but this will not affect the terms and conditions of the loan.




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                             Notes


Notes




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