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Recognizing the Loan Application Interview Process
By robertearl | March 5, 2008
Buying a home may be the most exciting, puzzling and straining financial transaction that you ever undertake. Even if you have done it numerous times you can still find the process complicated and intimidating, particularly when it comes to getting a mortgage loan. Reams of loan documents, uncommon terminology and anxiety serve to temper the joy of buying a new home. As soon as the sales offer and contract is signed, taking on the financing for the contract becomes paramount for all but a very few home buyers. If you master the steps required to qualify for a mortgage loan, however, much of the stress can be avoided. The following explanation of the loan application interview process is intended to help you through the intricacies of obtaining a mortgage loan.
The Loan Application Interview
Once you have selected a mortgage broker, the next step will probably be a meeting with a loan officer or other lender representative, whose job is to begin the collection of information the lender needs to approve the mortgage loan. They will break down the types of mortgage loans available to you, the interest rates and fees for each type and the qualification requirements. It is at this time that you will complete the loan application paperwork
By this time you should have a good idea of the general interest rates and fees being charged in the area. The total cost of a mortgage loan consists of the interest rate on the loan, origination fees, discount points, and miscellaneous other charges. One point is equal to one percent of the amount of the loan and is usually collected at the loan closing, or settlement. The interest rate affects the amount of the monthly payment, while points affect the amount of cash you must have at closing. Most lenders will offer a range of interest rate/point combinations to meet the borrower needs. In general, the higher the interest rate, the lower the points. For example, if the current market provides for an 8.5 percent interest rate with 2 points, a nine percent rate may be offered at no points. If you are a corporate transferee, however, your company’s relocation policy may pay all or part of origination costs and the lower rate will have more appeal. The loan officer is prepared to explain all of the mortgage information and your options to you when buying a home.
Robert Earl - Founder of The Earl of Real Estate Team is a Real Estate Entrepreneur serving the Northern Virginia Real Estate Market. The Earl of Real Estate Team focuses on Reston VA Condos for Sale
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