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Shopping for a Mortgage Loan

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					Workshop 2.




    Shopping for a Mortgage Loan
         Pros and Cons of Each Lending Business


          Banks                           Credit Unions




More money
  to lend                       Less Loan Options       Less regulated
                     Highly
                   regulated


   More Options                Less money to lend        Non-Profit



 Where can                                           Which
  you get a                                           one is
 home loan?                                          better?


    Savings & Loans                  Mortgage Companies




                                 Least regulated
                    Highly                          Most loans sold to
 Less choice
                  regulated                             investors
                               We do not allow you to use Mortgage brokers!!
        Loan products may vary by:

•Interest rate (7%, 8%, 8.25%…)


•How good your credit is.


•How long you have had credit.


•The amount of debt you have now.


•How much down payment you you need.
Who am I talking to:

Phone number:


1. Do you have any mortgage loans
     especially for . .

     Immigrants, non-resident
     aliens, etc.?


      First time home buyers?

      Community reinvestment act
     (CRA)?


For those loans:


   what is the interest rate?


   Is the interest fixed or adjustable?


   How many years is the loan?
Does this loan require "private
mortgage insurance" (PMI)? If so,
How much is the PMI?

Do you keep these loans or can they be
sold?

Is here a penalty if I pay off the loan
early?
2. If I am not ready to buy now, how
much will it cost to "lock-in" this
interest rate?

3. Can you estimate the "annual
percentage rate" (APR)?

4. What day of the month are
mortgage payments due?

5. Please give me an estimate of
your fees for:


    Application


    Credit report:


    Appraisal:


    Survey:


    Title insurance:


    Document fee:


    Are there any other fees?
                     Shop for a Mortgage Loan




                   Decide on a loan product and a
                               lender




                      Loan application meeting
                          with the lender




Loan Denied                         Loan “Pre-approval”

                                                    Workshop #3
                                                    Shop for real estate agent
                                                    Find a house Sign contract
Resolve
                                                    Notify lender
problem:
Establish credit
                              Sign and return
Rebuild credit
                              “Loan
Establish work
                              Commitment” letter
history
                    under the

  “Real Estate Settlement Procedures Act”
           You have the right to
•Shop & compare




•Know the total cost of the loan




•Get a Good Faith Estimate of the
loan & fees before paying any fees




•Know what fees are not
refundable
                       under the

    “Real Estate Settlement Procedures Act”
              You have the right to

•Ask questions about any charges
or loan terms you don’t
understand.


•A credit decision that is not based
on your race, color, religion,
national origin, sex, marital status,
age, or whether any of your
income is from public assistance.
•                                                        Why?!!

•Know the reason if your loan
application was not accepted.


                                                    BUYING YOUR HOME
                                                    Settlement Costs and Helpful Information




•Ask for HUD settlement costs                                           U.S. Department of Housing and Ur

                                                                        Office of Housing - Federal Housin




booklet “Buying Your Home”
                                        June 1997                                                    HUD
                    under the

  “Real Estate Settlement Procedures Act”,
   If you are applying for a loan through a
              mortgage broker...
             You have the right to:

   ○ Ask the mortgage broker to
   explain exactly what the mortgage
   broker would do for you.
   ○ Know how much the mortgage
   broker is getting paid by you and
   the lender for the loan.


                                Loan Application



The “Pay Me List”
Documents that lenders want
from you when applying for a
     home mortgage...




 Personal Identification Documents




                             Work History
                             last 24 months



                              t   h is
                       mo ney
             re   is
         whe
     And ???
      from




       Proof of Other Income
                           Rent History
                           last 24 months




         Federal Income Tax Returns for
        the last 2 years (including W-2 s)

                If you have not
               been in the US for
               more than 1 year..

 Get a Tax Summary
 Document of the last           Show documents
  year from IRS that    OR     of the date of your
shows “No Tax Filed”            arrival to the US
Last 3 Statements of All Your Bank Accounts




      Credit Report and Credit Score
       Homework

Begin shopping for a mortgage
loan by contacting one of the
lenders from the list below and
ask them the questions on the
attached form “Comparing
Mortgage Loans”.
         Coalition of Lenders
    These are lender approved by the International Institute
                        IDA Program
 Lender              Person to            Telephone
 institution         contact              number
 American Eagle      Danielle Bond        314-657-4757
 Credit Union
 Delmar Financial    Bruno Mruckovski 314-583-1112
 Company
 Southern        Jasna Murckovski 314-633-6103
 Commercial Bank
 National City       John Blair           636-485-5097

 US Bank             Walter Daniels       314-664-0240


Lenders are in alphabetical order by financial institution name
                                             Lender 1   Lender 2   Lender 3

Name of Bank/Mortgage Company:


Address:


Who am I talking to:

Phone number:
1. Do you have any mortgage loans
     especially for . .

     Immigrants, non-resident aliens,
     etc.?

      First time home buyers?

     Community reinvestment Act
     CRA?

For those loans,


   what is the interest rate?


   Is the interest fixed or adjustable?


   How many years is the loan?


   Does this loan require

      "private mortgage insurance"
     (PMI)?

           How much?

  Do you keep these loans or can they be
    sold?

   Is here a penalty if I pay off the loan
      early?
2. If I am not ready to buy now, how
much

   will it cost to "lock-in" this interest
rate?




3. Can you estimate the


   "annual percentage rate" (APR)?




4. What day of the month are
mortgage


   payments due?




5. Please give me an estimate of
your fees for:


     Application


     Credit report:


     Appraisal:


     Survey:


     Title insurance:


     Document fee:


     Are there any other fees?
                    Loan Application Documents
Your lender will tell you what documents you need to bring to your loan application
appointment. You will need to bring documents for the applicant and each co-applicant.

   Here is a list of the documents that are usually required:




• Social Security card, alien status card if non resident alien, and driver’s license or
other photo identification
• Name, address, and phone number, and starting and ending dates for every place
you have worked over the last 24 months.
• (Write a letter of explanation for any gaps in employment.)
• Pay stubs for the last 1-2 months for each job you are working
• Proof of any other income you have (such as child support, etc.)
• Federal income tax returns for the last 2 years, including W-2s (If you did not file
taxes for one or both years, obtain a “Tax Summary” from the Internal Revenue
Service (IRS)
• Name, address, and phone number for every landlord you have had for the last 24
months.
• Last 3 statements for any bank account(s) you have
• For each creditor you are paying, list the name and address of the creditor, type of
account, balance due, and monthly payment amount
• Take originals of these documents. Lender will make copies. Do not leave your
originals there. Always keep your originals in a safe place
I need   I Want
I need   I Want
                          Near Bus Stops?




     Near stores?

                                Near Schools?




   Near Work?


Near Worship Place?




                      Near Friends & family?
What Does A Real Estate Agent Do?

• Helps you find houses that meet your needs.
• Gets you in to look at those houses
• Writes the sales contract
• Negotiates with the seller’s agent
• May refer you to inspectors and title company
• Accompanies you at the “closing”


    Who pays the real estate agent?
   Their “commission” comes
   out of the sales price of the
   house.
   Buyers do not pay them!
  Hello,
  My name is Mr. Best Salesman. I
  am a:
  Seller’s Agent?
  Listing Agent?
  Buyer’s Agent?
  Dual Agent?




And the best one
  for me is…..?
       Condos and Mobile Homes
  We Do not recommend people buy Mobile Homes or
                    Condos
Condos:

In Addition to paying for your mortgage, you pay for
several other fees. There are rules for the Condo
Complex you must follow (for instance no pets allowed
in your condo). You pay for fees for the maintenance
of the property, and for other things your building might
have, like a pool or gym.

Mobile Homes:

We do not recommend mobile homes, because like
cars they lose their value over time.
•If you buy a mobile home today for $20,000, in one
year it will be worth about $15,000.
•Houses gain value over time. If you buy a home
today for $100,000, in 10 years it may be worth
$125,000
  The bricks

                Chimney
                              Foundation




               Walk around         Roof
Mortar between the outside
  the bricks    and take a
              good look at…



               Porch

 Corners of
the building                      Doors &
                                  windows
     Look for water and
     plumbing damages




Stains, puddles and bad smell!
Turn on water and flush toilets. Look
    for leaks and water pressure




  Turn on lights and several appliances
   at the same time to see how is the
        electrical service working




   Turn on the heat and the air
conditioning to see how they work
What to look for in the “Seller’s Disclosure” ?

• Has the Seller lived in the property over
the last 12 months?
• Have any systems been replaced by the
seller?
• How old is the roof?
• Did the seller have any pets?
• Termites! Bugs that eat wood in the
home
• Hazardous Substances (chemicals,
poisons, etc.)
• Basement & crawl space
• Sewer leaks

				
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