Meet Your Mortgage Team!

When starting the home loan process, you expect to work with a Loan Officer. But you might not be aware of all the behind-the-scenes mortgage team members that work hard to ensure your loan process goes smoothly from application to closing! So, let’s get to know them!

Your Mortgage Team Consists of:

Loan Officer

Your Loan Officer will be your first stop in the home loan process. Your realtor will be able to suggest a trusted Loan Officer but ultimately the decision will be up to you. Purchasing a home is a big decision and you want the best on your side! Your Loan Officer will gather the documentation needed to get your application and prequalification started and will assist you in choosing a program that will best suit your needs!

Production Assistant

Not all Loan Officers have a Production Assistant but if they do, you may often be in contact with them as well. The Production Assistant is an additional set of hands that can assist in collecting paperwork, communicating with various members of the mortgage team, and provides overall support to ensure a hassle-free home loan process.

Underwriter

After the Loan Officer collects what is needed for your loan application, they send it over to the Underwriter for approval. The Underwriter will make the decision whether to make a loan based on your credit, employment, assets, and other factors. Then they will match this risk to an appropriate rate and term or loan amount.

Loan Processor

Another member you will be in contact with throughout the home loan process is your Loan Processor. Your Loan Processor works with you to collect all the necessary documentation for your loan file. This includes pay stubs, W-2 forms, bank statements, and credit report explanations. They work as a liaison between you and the underwriter, title company, and other parties that may be involved to get you to the closing table.

Closer

Finally, we are at the finish line! The Closer reviews all loan-closing documentation to ensure accuracy and that your mortgage loan is fully compliant. They review for errors and work alongside the Processor, Loan Officer, and title company to get anything corrected as need. Once your closing date approaches and all documents are ready, the Closer prepares the loan package and forwards it to the title company for settlement!

The home loan process may seem a bit daunting at first but having the right mortgage team by your side makes all the difference! At First Home Mortgage, we pride ourselves on having a highly qualified mortgage team to ensure you have a stress-free homebuying experience. To find a Loan Officer in your area, visit www.firsthome.com/loan-officers.

To learn more about the home loan process, read our blog post about home loan milestones.

The Dangers of Rate Shopping

Buying a home will most likely be the largest purchase you ever make.  With that in mind, you might assume having the lowest interest rate is best, but this is not always the case.  The lowest advertised interest rate may not be your best option.  Some lenders and mortgage brokers advertise low rates but don’t inform you of all the additional points and fees that come with the mortgage.  Here are a few tips to take into consideration before rate shopping.

Rate Shopping Tip #1: Look at Points and Fees

Always ask about points, lender fees, broker fees, and settlement costs. Points are pre-paid interest that affects the quoted interest rate.  You can ask to have your points quoted as a dollar amount instead of just a percentage.  For example, on a $200,000 loan, one point would equal $2,000.

Rate Shopping Tip #2: Shop Smart

Interest rates fluctuate daily. Talk to your Loan Officer about when the best time to lock in on a rate is.  First Home Mortgage values honesty and service, so any questions you may have for your Loan Officer will be answered diligently, fairly, and in regard to your best interest. If you contact different lenders, make sure you provide each lender with the same information.  Such information will include the quality of your credit, location, type and use of your property, the size of the down payment, and/or the amount of home equity you have.

Rate Shopping Tip #3: Finding the Best Lender

Customer service may be the most important consideration when shopping for home financing. During the loan process, you should feel comfortable disclosing your financial information and asking questions. A trustworthy lender will be responsive and will assess your situation carefully to best suit your home buying needs. Make sure to choose a lender who can offer personalized options and takes the time to understand your goals.  Just remember interest rates don’t always matter.

If you have any questions or would like to get started on this home-buying journey, contact First Home Mortgage Corporation today!  We provide the mortgage you need to make “home” happen by delivering customer service that not only fulfills goals but exceeds expectations.

5 Misconceptions About Home Buying

Many people have preconceived notions about how to buy a house and what it takes to do it, but they aren’t always true. There are many pervasive myths surrounding the home buying process; read on for 5 misconceptions about home buying.

The First Step is to Look for a House

When someone is interested in buying a home, often times the first thing they do is start looking at houses. Before looking at homes, you should consult with a Loan Officer about getting pre-qualified for a mortgage. There are lots of benefits to prequalification including getting a more concrete estimate of how much you can afford and signaling to sellers that you are serious about buying.

Down Payments Are the Only Up-Front Cost

As nice as it is to think the only up-front cost of buying a home is the down payment, that’s not true. It’s important to keep closing costs in mind. A buyer can generally expect to pay closing costs between 2% to 5% of the loan amount, so it can be a considerable amount. Don’t forget about the cost of a home inspection, too. There are also moving costs to consider as well. It’s important not to completely drain your savings to put towards a down payment as there are these other costs to keep in mind (plus you should keep some money saved for potential emergencies and unforeseen expenses).

You Must Make a 20% Down Payment

The rule of thumb when it comes to down payments is that you should put down 20%. This doesn’t have to be the case. There are an abundance of down payment assistance programs and specialty loan programs available that allow for smaller down payments. For example, FHA loans allow for down payments as low as 3.5%. However, bear in mind that in most cases, you’ll have to pay private mortgage insurance (PMI) or mortgage insurance premium (MIP) when putting down less than 20%.

Your Credit Score Has to Be High

When it comes to buying a home, the higher your credit score, the better. However, you don’t necessarily have to have a stellar credit score to qualify for a home loan. There are even some loan options specifically tailored towards people with lower credit scores, such as FHA loans. Additionally, there are things you can do to improve your credit score so you’re in a better position to buy.

Don’t Buy a Home in Fall or Winter

Spring is notoriously the most popular time to buy a home, but that doesn’t mean you can’t, or shouldn’t, buy during other parts of the year. While many assume home buying in the fall and winter is something to avoid, it doesn’t have to be. There can even be benefits to home buying during the colder months, such as less competition from other home buyers and particularly motivated sellers.

There are a lot of misconceptions about home buying, so seeking the help of real estate and mortgage professionals can help you clarify what’s true and get you on the right path to homeownership. If you’re interested in learning more about the mortgage process and exploring your options, contact one of our experienced Loan Officers today!

Protecting Your Personal Information Online When Applying for a Mortgage

In this day and age, parts of the mortgage process have evolved to include virtual components. It is essential that you take steps to safeguard your personal information and data online. Here are some tips to keep in mind:

Apply with a Reputable Lender

It’s important that you choose a trusted lender to handle your mortgage needs. Be sure to do your due diligence when picking a lender and certainly before sending them any information. There are scammers out there who create fake mortgage websites with the goal of collecting your personal information. Check your lender’s NMLS number to ensure it is valid and correct and look for reviews online or referrals from people you know.

Use Secured Networks

You want to use a secured network for all your online dealings but especially when submitting personal information. Avoid using public networks. Make sure you’re on a password protected network that you trust so hackers can’t get in and steal your data.

Be Cautious Responding to Emails

Even if an email appears to be from your bank or loan officer, if it seems suspicious, don’t answer it. Beware of phishing scams that imitate legitimate email addresses with the purpose of gathering your personal information to use and exploit. If you’re unsure an email is on the up and up, reach out to your loan officer to confirm the email is actually from them before you click any links or submit any information. When possible, you should avoid sending sensitive information or documents over email, and instead opt to deliver this information in person or through a secure online portal.

Use Strong Passwords

When creating any online account, you want to make sure you have a strong password. This is especially the case when it comes to accounts associated with your mortgage. Seek to not only meet password length and complexity requirements but exceed them; the stronger the password, the better. Avoid using the same password across platforms. Enabling two-factor authentication when possible is also a good idea as it adds an additional layer of security when signing into accounts.

Trust Your Instincts

If something seems fishy to you, contact your loan officer directly to ensure everything is legitimate and you’re safe to act. It is much better to be safe than sorry when it comes to the security of your personal information and data. When in doubt, give your loan officer a call.

If you’re interested in starting the home loan process, contact one of our Loan Officers today to learn more!

Questions to Ask When Applying for a Mortgage

There are a lot of factors to consider when beginning your journey towards a home loan. It can seem overwhelming at first, especially if you’re a first-time homebuyer. There are some questions you can ask your Loan Officer that can help clarify the situation and get you on the path to the best possible mortgage solution for your needs. Here are some of the questions that may prove helpful when pursuing a new mortgage.

What Types of Loans Are There?

There are many mortgage loan options available and it’s important that you understand what they are so you can ensure you choose the best one for your unique situation. Your Loan Officer should explain the difference between fixed and adjustable rates, the different terms available, and additional special programs you may qualify for. While you don’t need to be an expert on every loan option on the market, you should feel like you have enough of an understanding that you know the loan product you and your Loan Officer choose is the right one for you.

Do I Qualify for Any Special Programs?

When it comes to special mortgage programs and loan types, your Loan Officer will need to ask you some questions to learn more about you and your background in order to determine whether you qualify. For example, to qualify for a VA home loan, there are certain military requirements you must fulfill in order to be eligible. Your Loan Officer should also be able to fill you in on various other special programs such as down payment assistance programs or special programs for first-time homebuyers.

How Much Home Can I Afford?

Getting prequalified can help you determine how much you can afford to borrow. Prequalification offers an estimate of how much home you can afford based on your finances and credit. It’s beneficial to consult a Loan Officer prior to starting your home search as you’ll know what your mortgage budget is so you don’t waste time looking at homes beyond what you can afford.

What Is My Interest Rate and APR?

It’s important to understand what interest rate you’d be getting on your mortgage loan. You should be able to receive a quote from your Loan Officer. You may also want to discuss locking in your interest rate if it’s one you want to ensure doesn’t change. Additionally, you’ll want to ask about the annual percentage rate, or APR, for your loan. The APR is the annual cost of a loan expressed as a percentage and factors in fees and other charges.

How Much Do I Need to Save for a Down Payment?

How much you need to put down depends on your particular loan type and any special programs you may qualify for. The rule of thumb is generally 20 percent of the purchase price but sometimes you’re able to put down far less—or even nothing at all. However, be sure to ask about private mortgage insurance, or PMI, which you’ll likely have to pay if you put down less than 20 percent.

These are just a few of the many questions you can ask at the start of the mortgage process. When you work with an experienced Loan Officer, they will be able to answer these questions and more so you have a solid understanding of what to expect. If you’re thinking about buying or refinancing, contact one of our knowledgeable Loan Officers today to get your questions answered.

Home Loan Milestones

Buying a home may seem like a daunting process but being prepared can ease your mind. It is important to understand what to expect when preparing to buy a home, and what to expect during the home buying process. Below we’ve provided a short outline of the five main home loan milestones of the home buying process.

Home Loan Milestone #1: Pre-Qualification

You’re ready to buy a home, congratulations! The very first step to take if you are ready to start your new home search is to get pre-qualified. This is a no-cost, no-commitment, 10-20 minute analysis that will give you a great starting point for your new home loan. Especially during times of social distancing, we’ve made this process even easier by offering pre-qualification applications to be taken over the phone or by completing an online form. This will allow us to determine an estimate of your maximum monthly mortgage payment and how much you can borrow. Pre-qualifying for a loan before you go home shopping helps you set a budget and strengthen your negotiating position when making an offer.

Home Loan Milestone #2: Application

Once you have found a home, you will make an offer to buy it from the seller. A real estate professional will conduct negotiations and a contract will be submitted to purchase, accompanied by the pre-qualification letter. Once your offer is accepted, you will receive your initial disclosure package and you will begin the application process. You will most likely need to provide your loan officer and processor with updated income and asset documentation, such as pay stubs and bank statements. To ensure your loan stays on track, you’ll want to have your docs completed quickly and thoroughly.

Home Loan Milestone #3: Processing

In this step of the process, your appraisal and title work will be ordered. Once all necessary documentation is collected, the processor will review everything for completion and accuracy. He/she will verify information on the title work, appraisal, credit report, and any additional docs needed. Once the processor has completely reviewed the full application package, he/she will pass it on to the underwriter. Your loan officer will keep you informed, answer any questions and navigate you through every step of the way.

Home Loan Milestone #4: Underwriting

Once your loan gets to this milestone, the underwriter will review the entire loan package to determine if your loan meets the guidelines for approval. Your underwriter will review your disclosures, credit, asset documentation, employment, appraisal, and additional documents along with the loan program’s guidelines and regulations. Once conditions have been met and any contingencies on the loan have been cleared, the underwriter will give the clear to close/final approval and the loan is sent to closing.

Home Loan Milestone #5: Closing

You are now in the final home loan milestone, closing! This is the best part! A date, time, and location should have already been confirmed for closing. At least 3 days prior to closing, you will receive your closing disclosure (CD). This document will show you your closing costs, terms of the loan, and how much money you need to bring to settlement. Closing may look a bit different due to COVID-19 restrictions. You may be asked to wear masks, wait in your car, or sign documents without other parties present. Once documents are signed, funds will be distributed, and ownership of the property will transfer from the current owners to you. The house is finally yours!

It may seem like a long process, but we strive to make it as seamless as possible. If you are ready to start your home buying process, contact one of our loan officers today!

A Q&A with Our Loan Officers on How COVID-19 is Impacting the Mortgage Industry

Now more than ever, we are living in uncertain and challenging times. COVID-19 has changed the way we live, work and play. To get a better understanding of how this pandemic has affected the mortgage industry, we interviewed a few of our Loan Officers from different regions including Heather Devoto from McLean, VA, Anne Borghesani from Plymouth, MA, and John Dolbec from Warwick, RI. Here’s what they had to say:

What has been the biggest challenge you’ve faced during this pandemic?

Across the board, teleworking has been an adjustment because of the lack of face-to-face communication, interruptions from kids at home and difficulty of training new employees. However, technology has made things easier because anyone can jump on a video conference call and quickly address any questions or concerns in a timely manner.

What advice would you give someone looking to purchase a home during this time?

If you are ready to buy or refinance, rates are low and it is a great opportunity to take advantage of that if you can. If you are not quite ready yet, it’s never too early to know where you stand in terms of qualifying to buy a home.

Are there any positive things you’ve seen during this time?

The mindset about virtual technology and video conferencing has certainly changed for the better; people are much more comfortable logging into software applications like Zoom and Skype. Also, as a society, we are realizing that we can carry on with “business as usual” despite not being in an office environment. And for a lot of people, working from home has enabled them to spend more time with family.

How has the home buying process changed during COVID-19?

Buyers can now make offers sight unseen. We’ve seen most home sellers will not accept buyers without a pre-approval letter. Financing has become more creative using drive-by appraisals, title companies are now doing remote closings for convenience, and Open Houses require appointments, masks, booties, and hand sanitizer.

How have you and/or First Home Mortgage adjusted and adapted during this time?

We’re adjusting well and every member of our team has worked hard to take action to keep coworkers and clients as safe as possible. Our offices have come together working harder than ever. We’ve implemented new procedures to increase our levels of customer service.

Are there any other tips you’d like to give to potential homebuyers?

The market is competitive, and you want to be able to move fast! Spend the extra time in the beginning to educate yourself about the intricacies of buying a home so you can be confident and make smart home buying decisions. Once you are ready, talk to a loan officer to get the ball rolling on qualifying instead of looking online at homes you may or may not be able to afford.

Are you looking to buy a home or refinance? Please contact one of our loan officers today!

Mortgage Calculators

Here at First Home Mortgage, we strive to deliver excellent customer service from the start. We provide tools and resources to better prepare you for purchasing or refinancing your home. Whether you’re buying a home for the first time, you’ve purchased before, or you are refinancing, you will have questions and concerns. “What will my mortgage payment be?”, “How do I know it’s a good time to refinance?”, “What can I afford?” – these are all very important questions that will be the basis of your journey. With these questions in mind, we have provided 9 different mortgage calculators to help you get started!

Mortgage Calculator #1: Mortgage Payment

Repayment of a mortgage loan requires the borrower to make a monthly payment back to the lender. That monthly payment includes both repayment of the loan principal, plus monthly interest on the outstanding balance.

Mortgage Calculator #2: Proceeds from Sale of a Home

How much profit will you make if you sell your home? This is largely dependent on two things: the amount you still owe on the home and what you will have to pay for selling the home.

Mortgage Calculator #3: Compare Two Mortgage Loans

When purchasing a home, the mortgage you choose and the options you want with it will have a significant impact on how much your home costs you in the long run.

Mortgage Calculator #4: Time to Refinance?

The decision to refinance a home mortgage can involve many factors. You might want to take cash out of your home and apply it elsewhere or obtain a lower rate to lower your monthly payments.

Mortgage Calculator #5: Debt to Income Calculator

Your DTI is the percentage of your gross income used to cover your mortgage and other debt payments. This ratio and your credit score are two key factors used to determine if you qualify for a loan.

Mortgage Calculator #6: Rent vs Buy

Deciding whether to rent or buy relies on many factors. Take into consideration the difference in monthly rent vs. mortgage payment, home value, rent increases, interest rate, and taxes to name a few.

Mortgage Calculator #7: Home Affordability

Your ability to obtain a loan for a new home purchase is based on several aspects. Lenders typically focus on three key ratios: Loan-to-Value ratio, Housing Ratio, and Debt-to-Income ratio.

Mortgage Calculator #8: Adjustable Rate Mortgage Analyzer

ARMs typically offer home buyers the advantage of having a lower mortgage payment during the initial period of the mortgage. Once the initial period expires, the rate will reset at current interest rate levels.

Mortgage Calculator #9: Compare a Bi-Weekly Mortgage to a Monthly Mortgage

One popular strategy for accelerating the payoff of a loan is to make ‘Bi-Weekly’ payments. Under a Bi-Weekly mortgage plan, you will make payments to your lender every two weeks instead of monthly.

While we consider these mortgage loan calculators to be very helpful and educational, everyone’s personal situation varies, and reaching out to one of our Loan Officers will give you a more accurate sense of what you would be facing! Find a Loan Officer in your area today!

FHA Revises Condominium Requirements

After a long-awaited update, the FHA is finally issuing a change to condominium guidelines. It was announced Wednesday that spot approvals are back, and steps are being taken in order to loosen eligibility requirements. With these revised guidelines, FHA is expecting the update to qualify an additional 20,000-60,000 condo units per year.

Changes that will come with the new guidelines include extending the re-certification deadline for approved condo projects from two years to three and loosening restrictions on owner occupancy rules allowing projects to just be 50% owner-occupied. Department of Housing and Urban Development Secretary, Ben Carson, is hopeful the updated guidelines will open doors and allow more opportunity for home ownership. “FHA is publishing a new rule in the Federal Register that we believe will offer significantly more options for individuals and families to buy a home, specifically the kind of home more and more people are looking for in order to achieve home ownership, and of course that is a condominium.” Carson stated. Out of the 150,000 condo projects across the country, just 6.5% have approved financing through FHA.

The National Associations of Realtors has been advocating for change in FHA requirements for over a decade and stated they are thrilled with the change and the opportunities that will now be available to prospect homebuyers. NAR President John Smaby stated, “This ruling, which culminates years of collaboration between HUD and NAR, will help reverse recent declines in condo sales and ensure the FHA is fulfilling its primary mission to the American people.”

The updated guidelines will take effect on October 15, 2019.

5 Things to Consider When Buying an Investment Property

Buying real estate can be a great investment; whether you want to purchase a primary residence, flip a property and sell it, or rent it out to make a profit. If you have chosen the latter option, here are a few things to take into consideration.

Down Payment: Be ready to put down a larger down payment on the house – at least 15-25%. Expect higher interest rates, and slightly more restrictive guidelines.

Property Management: Are you ready to be a landlord or will you have a property management company handle the busywork? If you are taking on the task of being the landlord, be prepared to be available 24 hours a day. If something stops working in the middle of the night or while you are on vacation, you will be responsible for finding a solution to the problem in a timely manner. If you plan to hire a property management company, they will take care of paperwork, finding tenants, fixing repairs and more, but it will come at an added cost to you.

Expected Rental Income: Will the property make a profit or end up being a money pit? If this house is currently being rented out, ask the owners how much they charge in rent each month. Check out other rentals in the neighborhood and see what the average monthly rental income is. If it isn’t high enough to cover the mortgage and other expenses attached to the property, it may be best to pursue a different property.

Expenses and Costs: Do you have the funds for an extra expense account in case any problems emerge in the house? You never know when a problem will crop up. Whether the AC unit breaks or the refrigerator stops working, make sure you have enough funds to pay for sudden repairs and replacements.

Risks of Renting: If you don’t have tenants for a month, will you be able to pay the mortgage? If the current tenants damage the property, will you be able to afford the repairs? What happens if you go to check on the property and your tenants flew the coop?

Buying an investment property is a big decision, but if you do your research and are prepared for any and all possibilities, it can be a great investment and pull in some extra income each month! Talk to a loan officer near you for more information.

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