When a home buyer applies for a home loan, the application is accepted or rejected based on criteria that prove that the applicant is a financially stable and reliable candidate to make their payments on time. Requirements and qualifications vary based on each home loan program. An underwriter is a hired vendor responsible for reviewing each application to assess the risk of lending to a borrower. This process not only protects the lender from potential default but also protects the borrower from entering a loan that they cannot afford. During their assessment, they take three factors into consideration. Each factor is weighted differently based on the type of the home loan. The Underwriting Process – The 3 C’s To fully assess the risk of a borrower, underwriters review a borrower’s credit, capacity, and collateral. Based on their assessment, they determine… Read More
Throughout the home buying process, you will encounter a series of steps to take that ensures an easy, efficient and prompt closing. Understanding what you are able to afford is a great first step in shopping for anything. So, why wouldn’t you do so for what could be the largest purchase of your life? When you get pre-approved for a mortgage home loan, it means that a lender has evaluated your credit, employment history, and residential history to determine which home loans you are eligible for, the conditional size of the home loan that you could borrow and the conditional interest rates that you would be offered. At Chris Doering Mortgage, we make it our priority to make the process of purchasing a home as easy as possible. That’s why we outline everything you need to know about getting pre-approved… Read More
Buying a home is a large investment and it’s important to have a clear understanding of the cost of your mortgage loan. Home shoppers are often confused about the difference between APR (Annual Percentage Rate) and interest rates. When evaluating a mortgage loan, interest rates can tell a different story than APR. It’s important to note that neither is better or worse than the other. If you understand what each represents, then you can make an educated decision on your mortgage loan.
What is Rate Lock? Mortgage rates can change daily, even hourly. When a mortgage rate is locked, it protects the borrower from interest rates rising between the time that the rate is locked and closing. However, because of changing rates and closing timelines, timing is everything when it comes to locking in a rate for a home mortgage. A rate lock guarantees a borrower that they will receive a specific interest rate, at a specific price during a specific time for a home mortgage loan. This protects them from rising interest rates.
Throughout the process of securing a home loan and buying a home, you will encounter a series of costs outside just your down payment. Costs that accrue during the mortgage process and outside of the principal and interest on your home loan are called closing costs.
Mortgage interest rates are inherently variable. They fluctuate based on economic factors, both global and domestic, housing supply and demand for a particular area, and the credit score of the borrower. There’s not much an individual borrower can do to stabilize the national economy. You can be smart about when and where you look for a home and make informed choices about what you can afford. But the major determining factor of mortgage interest rates that you have the most control over is credit score.