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    Email: info@kwestmortgage.com

  • Knowing the answers to your mortgage questions can empower you to make smart decisions.

    Learning about your different mortgage options before you meet with a lender can help you get the best deal on a house that will benefit your family for years to come. Here are some common mortgage questions you may have during the home-buying or refinancing process.

  • What is a mortgage Loan Estimate?

    A Loan Estimate is a three-page form that you receive after applying for a mortgage. The Loan Estimate tells you important details about the loan you have requested and it must be provided to you within three business days after submitting your mortgage application.

    When you receive a Loan Estimate, the lender has not yet approved or denied your loan application. The Loan Estimate shows you what loan terms the lender expects to offer if you decide to move forward. If you decide to move forward, the lender will ask you for additional financial information.

    The form provides you with important information, including the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also gives you information about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future. In addition, the form indicates if the loan has special features that you will want to be aware of, like penalties for paying off the loan early (a prepayment penalty).

    The form uses clear language and design to help you better understand the terms of the mortgage loan you applied for. All lenders are required to use the same standard Loan Estimate form. This makes it easier for you to compare mortgage loans so that you can choose the one that is right for you.

    For additional information, including an interactive guide to the mortgage Loan Estimate, visit:
         "http://www.consumerfinance.gov/owning-a-home/loan-estimate"

  • How much home can you afford?

    Some factors used to determine that amount:

    Credit Score/Rating  The higher your credit score, the more likely you will qualify for a lower interest rate.

    Interest Rate - The lower your interest rate, the more money you can borrow at the same monthly loan payment amount.

    Down Payment - The more money you can pay up front, the less your loan amount will be. Additionally, if your down payment is 20% or more of the property value, you will not need to pay mortgage insurance, resulting in lower monthly mortgage-related expenses. Debt-To-Income Ratios –  There are two debt-to-income ratios that are used to determine your maximum loan amount:

    Debt-To-Income Ratios - There are two debit-to-income ratios that are used to determine your maximum loan amount:

    1. Housing ratio (or front-end ratio); is the percentage of your gross monthly income that is dedicated to paying your monthly mortgage-related expenses (principal and interest, property taxes, homeowner’s insurance, mortgage insurance). Generally, this ratio should be 28% or lower.
    2. Total debt ratio (or back-end ratio); determines the percentage of your gross monthly income that is used to pay your combined monthly debts (mortgage-related expenses, credit cards, car loans, student loans, child support, etc.). Generally, this ratio should be 36% or lower.

     

  • 1. How do you qualify for a loan?

    The idea of meeting with a lender can be intimidating, especially if you’re buying your first home. After all, this is probably the biggest purchase you’ll ever make! Think of your first meeting with a lender as a get-to-know-you session. They’ll simply want to learn a few basics about you and your financial situation. Then comes the paperwork! Once your loan process gets started, be prepared to provide proof of:

    • Where you work
    • Your income
    • Any debt you have
    • Your assets
    • How much you plan to put down on your home

    Kwest Mortgage will clearly explain your mortgage options and answer all your questions so you feel confident in your decision.

    2. Can you get a mortgage without a credit score?

    This is one of the most commonly asked mortgage questions. If you’ve paid off all your debt—and I recommend you do before buying a home—it is possible you won’t have a credit score when you meet with a lender. But don’t worry; you can still get a mortgage.
    If you apply for a mortgage without a credit score, you’ll need to go through a process called manual underwriting. Manual underwriting simply means you’ll be asked to provide additional paperwork for the underwriter to review personally.

    3. What’s the difference between being prequalified and preapproved?

    A quick conversation with your lender about your income, assets and down payment is all it takes to get prequalified. But if you want to get preapproved, your lender will need to verify your financial information and submit your loan for preliminary underwriting.
    A preapproval takes a little more time and documentation, but it also carries a lot more weight.

    Which is better?
    Think of prequalification as an initial step and preapproval as the green light signaling that you’re ready to start your home search. When sellers review your offer, a preapproval means you’re a serious buyer whose lender has already started the loan process.

    4. How much should you save for a down payment?

    I recommend putting at least 10% down on a home, but 20% is even better because you won’t have to pay private mortgage insurance (PMI). PMI is an extra cost added to your monthly payment that doesn’t go toward paying off your mortgage. It’s worth putting a big down payment and here’s why:

    • You’ll have built-in equity when you move into your home.
    • You can finance less, which means you’ll have a lower monthly payment.

    On the flip side, if you buy a home with little to no down payment and the market dips, you could be stuck until home values recover.

    5. How do you know which home mortgage option is right for you?

    I recommend putting at least 10% down on a home, but 20% is even better because you won’t have to pay private mortgag