Homebuyer Resources

Amortization

Repayment of loan principal over time with scheduled payments that consist of both principal and interest. The loan balance declines by the amount of the principal in the scheduled payment.

Annual Percentage Rate (APR)

The APR shows the costs of your mortgage loan as a yearly rate. The APR includes upfront fees, such as points, as well as interest, and is intended to show you the true cost of your loan. When comparing one loan to another, be sure to compare APRs to get a true picture of what each one will cost you.

Closing Costs

The cost of getting a mortgage in addition to the down payment. This is usually 3-6% of the total loan amount.

Credit Bureau

An agency that collects data on individual payment records on loans, credit cards, and other debts, and compiles a credit history based on this information. They also provide credit reports to lenders, creditors, and consumers.

Debt-to-Income (DTI) Ratio

The DTI ratio compares how much a borrower owes with how much they earn in a given month.

Equity

Equity is the portion of the property that you actually own through your payments versus the portions that you still owe the mortgage lender. The longer you stay in your house and make the required payments, the more equity you will have.

Escrow

An account set up on your behalf in which a portion of your monthly payment is held to pay property taxes and insurance.

Gross Income

Amount earned before taxes or types of payroll deductions. Gross income may include overtime commissions and dividends and come from any other resources for which steady history can be shown.

Loan-to-Value (LTV)

A mortgage’s LTV ratio describes the ratio of the value of the property to the amount of outstanding mortgage balance.

Points

Points, also known as discount points, lower your interest rate in exchange for paying an upfront fee.

Pre-Qualification

While not an approval, this gives borrowers an estimate of how much money they can borrow to purchase a home.

Pre-Approval

A commitment from the lender to make a loan to a specified borrower prior to identification of the specific property.

Private Mortgage Insurance (PMI)

PMI is typically needed when financing a home and putting less than 20% down. Lenders require PMI to help cover the risk gap for the financing.

Do’s when you plan to apply:

Keep an Ongoing Paper Trail
You’ll need to maintain ongoing documentation related to income, employment verification, and current debts and obligations. Keep your W2s, tax return documents, pay stubs, and bank statements handy.

Provide Money Deposit Receipts
This includes an earnest money deposit from your personal bank account or gift funds. Gift funds are acceptable only if certain criteria are met. Reach out to your loan originator for clarification.

Maintain Employment and Income
You’ll need to show stability through the mortgage application period. This process goes much smoother if you keep your income steady and avoid major changes. Pay raises and promotions are exceptions to this expectation.

Create a Savings Plan
Buying a house is exciting, but focusing on saving during this period is key. You’ll need funds for an earnest money deposit, down payment, and closing costs. Any major purchases could impact your credit. Pay your bills on time and be mindful of spending habits.

Understand Credit Pulls
Your lender may pull a new credit report just prior to closing to check new debt. If your recent credit activity raises a concern, you may be asked to explain.

Ask Questions and Communicate
Your team is there to help you and answer any questions that might come up. Trust their expertise, communicate effectively and often, and learn what you can about the loan process to set yourself up for success.

Don’ts after you apply:

Close or Open Bank Accounts
Before you open, close, or transfer money across accounts, check with your loan officer on how this may affect your qualification or documentation. Changes could result in a delay for the loan origination.

Make Large Bank Deposits
If you deposit any money outside of your automated payroll deposits, especially cash, check with your loan officer on the documentation you will need to provide to verify their sources.

Change Jobs, Employer, or Employment
You can change jobs, as well as amend any tax returns, but you’ll need to make your loan officer aware because it may impact your qualification and documentation. If shifts do occur, you may need a new loan approval.

Make Major Purchases
This involves large spending prior to or during the contract period. It’s tempting to get new furniture, a car, or house appliances, but these purchases will hurt your savings, debt-to-income ratio, and credit utilization.

Open a New Line of Credit
This also includes closing credit lines, co-signing on loans, or making major purchases on credit cards.

Panic, Stress, or Isolate
Your team wants you to be successful, knowledgeable, and confident during this process. Whatever your finances, be sure to include all debts and liabilities on your mortgage application. Keep the lines of communication open and trust they want you to get across the finish line.

Key Address Updates

• Move over or set up utilities for your new address (energy, water, gas, internet, cable, etc.).

• Update your mailing address with USPS (including forwarding address updates).

• Update your ID or driver’s license.

• Update your car registration and insurance.

• Update your voter registration for any needed address changes.

• Update your address on your credit card accounts.

• Update your new address with your employer.

• Find doctors and reliable professionals around you or update your new address in your online medical portals.

• Transfer subscription services to your new address.

• Register your child(ren) to a school within your area.

Moving and Post-Moving Essentials

• Organize and unpack your moving boxes by room.

• Consider autopay to stay on top of monthly home payments and expenses (HOA fees, property taxes, etc.).

• Purchase a security system.

• Purchase cleaning supplies that fit your new home’s needs.

• Stock up your pantry, fridge, freezer, and cabinets.

• Meet your neighbors, invite family and friends over to celebrate once you’re settled.

• Line up a pet sitter (or other arrangements) for moving day.

• Child-proof and pet-proof your new space.