The Mortgage Process

Additional information about the mortgage loan process.

When it comes to mortgage loans there are so many options it's easy to feel overwhelmed. 

Which is why we encourage all of our clients to start by speaking with your Residential Mortgage Loan Originator / Loans for Leaders Specialist.

They can answer any and all questions you may have and assist you through each step of the process.

PREPARATION

You can prepare yourself for the mortgage application process by asking yourself these simple questions:

  •     How much can I afford to pay each month?
  •     How long do I plan on keeping this home?
  •     Is a lower monthly payment a higher priority than paying the loan down quickly?
  •     Am I able to make a down payment?
  •     How many years do I want to pay a mortgage?
  •     Will I be incurring any new obligations that I need to consider?

The answers will not only help your RMLO show you additional loan options but they will also help your specialist advise you on the best choices for your unique financial situation. 

LOAN TYPES

There are a wide variety of loan options to choose from and it will be useful to know what's important to you and your family to select your best choice. Below are some dynamics you may want to consider:

  •     The larger the down payment, the lower your monthly payment will be.
  •     A fixed-interest rate will tend to be higher than the start rate of adjustable rates.
  •     The longer the term of payback, the smaller the monthly payment.
  •     The smaller your payment, the larger the amount that is going to interest.
  •     The more you pay to interest, the slower you are building equity.
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Understanding loan types will be extremely helpful when purchasing a home. Ultimately, there are three basic types of loans to consider:

Loans are also classified as either government or conventional loans and conventional loans are further broken down into conforming and non-conforming categories. 

To qualify for a conforming loan (or an "A Paper" loan), it must fall under the guidelines established by Fannie Mae and Freddie Mac, corporations who have established industry standards and guidelines that govern credit requirements, down payment amounts and maximum loan amounts. 

Once you have decided on a mortgage type, you'll look over the individual features with your loan officer to determine which best meet your needs.

(Found a term you don't understand? Feel free to Ask a Specialist or consult our glossary for clarification.)

CREDIT

Excellent credit can be very rewarding when applying for a mortgage and poor credit will limit your available loan options. A credit score or FICO score is a system of points earned based on your credit history. This three-digit number (from 300 to 900) is influenced by such factors, among others, as:

  • late payments
  • debt to credit ratio
  • total debt amount
  • age of accounts (the older the better)
  • inquiries

There are three major credit bureaus (Experian, Equifax and TransUnion) that produce comparable credit scores using a version of FICO, the industry standard developed originally by Fair Isaac and Company. 

Since this credit score or FICO score is used by most lenders to determine your qualifications for a loan, you may want to see what you can do to increase it before you apply for a mortgage. 

Your Residential Mortgage Loan Originator will explain all options and costs based on your credit during the Pre-Approval process. If you have any questions please call a qualified mortgage expert:

Kathy King
Office: 972-539-2500 x222
Alex King III
Office: 972-539-2500 x224
Alex King IV
Office: 972-539-2500 x233
Chris Arnold
Office: (972) 539-2500 x234
Taylor Alvarado
Office: (972) 539-2500 x235
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