Financing Your                  New Home

It is never too early to speak to a lending professional in order to get information that can help you improve your credit score, plan for future mortgage payments, and to secure pre-approval for a loan.  Below is contact info for several lenders that HomesByCardillo would recommend.  There are many more on the internet, or you can ask friends and family as well;

 

Scott Hevel

Great Western Home Loans

Rockwall, TX

469-287-8600 (office)

972-834-9798 (cell)

shevel@gwloans.com

 

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Brooks Kelly

HomeBridge Financial Services

Plano, TX

469-298-1452 (office)

214-402-2647 (cell)

bkelly@homeBridge.com

 

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Charlie Waller – WR Starkey Mortgage

5055 W Park, Plano

2740 N Dallas Pkwy, Plano

1000 N Highway 78, Wylie

972-442-3757

CWaller@wrstarkey.com

 

 

In today’s housing market sellers require that buyers include documentation of their ability to pay for the home with all offers. That is why it is very important to select a lender that you are comfortable with and then work closely with them to help facilitate your purchase. There are basically two ways to pay for a home and two ways to document the ability to pay…

 

1.Cash Purchase - “Proof of Funds”; The buyer is planning to pay for the home entirely with money they already have and not by borrowing any funds from a bank. The bank that currently holds the buyers money will provide a letter that states that they currently have money secured at their facility which is available to use for a purchase. The funds can’t be tied up as an investment, they must be immediately available for the buyer’s use.

 

2.Loan Purchase – “Pre-approval Letter”; The buyer is planning to apply a certain amount of cash toward a “down payment” and then borrow money from a bank to pay the remainder of the cost of the home. The buyer will then pay back the bank in pre-arranged smaller payments over time. The loan originator will screen the buyer, asking questions about income and current other debt responsibility of the buyer. It is very important that the buyer be completely truthful and accurate during the pre-screening process, otherwise final approval may not follow the early screening process. The buyer will then receive written pre-approval, which is basically a promise by the lender that they will provide funds on behalf of the buyer. The lender will also request documentation (pay stubs, W2, bank info, etc) to verify income and, financial situation.

 

The lender can answer specific questions about fees they charge and other costs that will be due at closing… be sure to ask questions ! They work for you and should be available to answer your questions. Ask them to explain everything in simple terms, put things in writing, and if you are not sure about something, don’t be afraid to ask again.

 

Things you should find out from lender;

 

  • What is the total amount you are approved for?

  • What is the total monthly payment cost at different price points?

    • After all, just because you get approved for $200,000 doesn’t mean you are comfortable spending ALL of that money on a home.

    • The monthly cost is commonly referred to as PITI… Principle, Interest, Taxes, and Insurance. When you make your monthly mortgage payment it will include charges for the Principal (part of the money you borrowed toward the home), Interest, Property Taxes, and Homeowner’s Insurance. All of the principal and interest goes to the bank. They put the tax and insurance money into an escrow account and pay those for you at the end of each year. You can elect to pay the taxes and insurance yourself and not pay with the mortgage, but some people get into trouble at the end of the year if they can’t come up with that once a year lump sum.

  • What will my down payment be?

    • Different loans require different down payment amounts, usually stated in terms of percentage. For example, the very common FHA 203B loan requires 3.5% down payment.

  • What fees do you charge and how much will I need to bring to closing (“Cost at Closing”)

    • This cost will include your down payment, fees to the mortgage company, and fees to the title company. A very rough rule of thumb calculation is about 3% plus the down payment.

    • BUYERS DO NOT NORMALLY PAY THE REAL ESTATE COMMISSIONS, the seller pays the commissions from their sale funds as per agreement in local MLS.

  • What should I do financially (and NOT do) to get pre-approved in the future and/or now that I am pre-approved for a loan?

    • Lenders can tell you what debt is best to pay off.  Some things MUST be reduced, some things MAY be reduced, and some open lines of credit may actually help to increase your credit score and help you.  TALK TO A LENDER FIRST !!!

    • Once you are approved for a mortgage loan you should not make any large purchases, establish any additional lines of credit, change jobs, or materially change anything about your financial picture. Always ask the lender you are working with. 

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