Getting a Mortgage II

What Every Young Professional Should Know (Part II)

December 22, 2010

By Chris Seeley, Assistant Vice President and Mortgage Loan Officer
Premier Bank & Trust

Chris Seeley has a message for his fellow young professionals: There’s never been a better time to be a first-time homebuyer. In an article titled, “What Every Young Professional should know before Getting a Mortgage,” the Assistant Vice President and Mortgage Loan Officer for Premier Bank & Trust and ystark! member explains why now is the perfect time to buy, how bankers and brokers differ, what goes into a good faith estimate and why he’s confident you’ll end up with a house you can afford.

Continue reading the second part of this important series from Chris Seeley at Premier Bank & Trust - these important tips are crucial for any YP considering a mortgage. Before you get the keys to your dream home, read on!

Decoding the “Good Faith Estimate”

The good faith estimate should be totally transparent, totally accountable. You should know every single penny you’ll have to spend going in. You’re also likely to see some fees at closing.

A Closing Checklist

Origination Fee: Any and all underwriting fees, processing fees, or points being paid will show up grouped together as an origination fee. These fees go to the company that takes your loan application.

Required Services: The second set of expenses you’ll see are the passed along costs for “required services” the lender incurs on your behalf. These could include paying for a credit report, an appraisal, tax service fee, flood certification, document prep fees, shipping the file to the investor, and wiring funds.

Title Costs: The third set of expenses is paid to the title company to assure you’re buying a home that has clear title to it.

Finally, the good faith estimate breaks out the costs of a location survey, escrows for mortgage insurance, property taxes, and other various types of insurance. Once you accept the good faith estimate and agree to move forward with the loan, we charge an application fee to lock the loan. Then we have 45 days to get your appraisal in order and verify your credit, income, and down payment funds. Once your financial information is verified, the loan decision is made. 

If the loan is approved, loan documents are completed and sent to the title company for closing. Generally, you’ll need two years worth of W-2s, 30 days worth of pay stubs and you’ll have to verify you have the funds to close and that those funds have been in your bank account for at least 90 days.

The Advantages of Being a First-Time Buyer

Feeling overwhelmed? Don’t be. If you’re buying your first home, you probably have 3-4 times more flexibility than a second- or third-time homebuyer. It used to be that the biggest mistake a young homebuyer could make was to purchase more house than they could afford. That’s virtually impossible these days with all the new State and Federal laws in place. As your lender, we will make sure your income suits your mortgage payment and that you can make the payment. 

... Did you miss Part I on what every YP should know about getting a mortgage? Click here to read Part I now!