A little clarity. A lot of confidence.

Once you apply and turn in all necessary documentation, I will go to the drawing board to determine all programs you qualify for, then narrow down the best and most beneficial/most affordable option. You don’t need to worry about which is best for you; that’s my job! And I will educate you on the options available and which is best for your circumstances.

I will run numbers to determine the maximum estimated purchase price and loan amount you can qualify for, based upon your income, assets, and credit. In many cases, you may qualify for more than you feel comfortable spending, and just because you can qualify for more, doesn’t mean that you should.

Pre-approvals are good for 120 days (4 months) until your credit report expires. If you haven’t located the right home within those 4 months, it’s very easy to re-issue and extend your preapproval. We will do an updated credit inquiry (soft pulls available), and gather updated documents such as paystubs and bank statements.

Typically, your cash out of pocket will include 3 buckets of money:

1) Down payment, which is a percentage of your purchase price.

2) Closing costs, which include all third-party fees such as appraisal, title work, and county recording fees.

3) Prepaids, which include property taxes, homeowner’s insurance, and prepaid interest.

I will provide an estimated amount based upon the budget you are shopping within.

Principal, interest, property taxes, and homeowner’s insurance. If your property has HOA (homeowner’s association) dues, that is typically paid for outside of your mortgage.

Celebrate and focus on moving into your new home! Your realtor will send me a copy of the contract and I will touch base with you to discuss next steps. Unless you’ve gone through the full underwriting process already, this is the stage at which this process will begin.

You’ll begin shopping for homeowner’s insurance (which I also offer to provide assistance with). After completing any necessary home inspections, we’ll order the appraisal and gather any additional documents and information needed to prepare for your loan to be funded on closing day.

PMI is private mortgage insurance, which protects the lender in the event of the mortgagor defaulting on their payments. For Conventional loans, this is required for down payments of less than 20% of the purchase price. For FHA loans, with down payments of 3.5%–9.99%, PMI is required for the life of the loan, and for down payments of 10% or more, PMI is required for 11 years.

For Conventional loans, PMI can be removed upon request once your loan balance reaches 80% of the appraisal value. It will automatically fall off when your loan balance reaches 78% of the value of the home.

Certain loan programs allow you to pay a lump sum for the PMI up front instead of monthly, but it’s vital to evaluate your long-term goals with me before deciding if this is a beneficial option for you.

For most loan programs, a first time buyer is defined as a person who has not had their name on a mortgage OR deed of any property in the last 3 years.

Many first time buyer programs offer lower down payment options ranging from 0%–3% of the purchase price. (Down payment assistance programs addressed below.) Certain programs offer reduced interest rates.

Down payment assistance is available for eligible buyers who meet the specific requirements of the programs offered in their purchasing area. Many of these programs require the buyer to have a credit score of 640 or above, earn less than the income threshold for the county they are purchasing in, and be a first-time buyer.

Each down payment assistance program is unique and has varying terms. For many (but not all) programs, a grant is provided for a percentage of the purchase price. The amount of the grant is placed as a 2nd lien on the home and may or may not have a monthly payment required. The grant can be forgiven after the initial mortgage has been paid for 10 years, and is pro-rated after 5 years. Please note: this is based on the initial mortgage period, so if the homeowner refinances or sells the property within the first 10 years, a portion or all of the grant may need to be repaid.

Some down payment assistance programs have higher closing costs and interest rates. If down payment assistance is granted, the buyer will typically still be responsible for associated closing costs and prepaids, unless covered by a seller credit. The buyer may also be required to complete homebuyer education courses.

For primary residence purchases, eligible sources include (but are not limited to): checking, savings, and other deposit accounts owned by the borrower(s); 401(k)s and eligible retirement accounts; investment accounts such as stocks or bonds; gift funds (a monetary gift from a family member or close friend with proper documentation); a gift of equity (the seller gifting a designated amount of equity established in the home with proper documentation); proceeds from selling personal property such as a vehicle (with proper accompanying documentation); or down payment assistance programs.

Including but not limited to: undocumented cash; personal loans (can vary based upon the loan program); credit cards; funds from a business account unless adequately documented and approved by the lender; proceeds from illegal activities; and unverified gift funds.

IMPORTANT: Discuss with me where the funds for your down payment will be coming from before depositing anything outside of your regular payroll into your accounts. Additional documentation and steps may be required.

We will provide our best estimate of what amount will be needed on closing day throughout the process. However, once under contract, this number can be very fluid as there are many moving pieces with property taxes, homeowner’s insurance, title fees, HOA set-up fees (if applicable), and other third-party costs that lenders and realtors don’t control.

Final numbers will be balanced with the title company 1–3 days before closing.

With a fixed rate mortgage, your principal and interest will never change. However, property taxes and homeowner’s insurance can change over time.

Each year, the county will provide you a copy of your property tax bill. If your mortgage is escrowed, you do NOT need to pay the bill. However, it’s highly recommended you keep a copy of it for your records and compare it to your previous tax bill. Your homeowner’s insurance premium renews annually. Your homeowner’s insurance agent/company should provide you an update on your premium, but often, they will send the bill directly to the servicer without notifying you. The insurance broker I recommend will contact you each year with a review of your renewal policies available.

If the new property taxes or homeowner’s insurance is higher than the previous year’s bill, your escrow account may be short the next time the bill is paid. Each year, you will receive an escrow analysis which shows the prior year’s debits and credits along with the projected debits and credits and any necessary adjustments to your escrow payment to accommodate for any changes.

First, please ask your realtor or me if we see a large disparity between the current property taxes compared to typical tax assessed values. Depending on the county you live in, the county re-assesses property taxes every 1–2 years and part of their assessment is reviewing the most recent sale price of the home. Therefore, if the current tax bill is based off an assessed value that is lower than the price you are purchasing the home for, the tax bill will “catch up” to that sales price once re-assessed. We can help you crunch numbers to evaluate where your property tax bill may adjust to in the coming year so you know what to prepare for. (No matter what, in due time, tax bills always “catch up” to current county assessed values!)

You have the option to pay extra towards your escrow either monthly or one-time at any point throughout the year. Doing so can help prevent escrow shortages if property taxes or homeowner’s insurance increases. However, it’s important to note that the mortgage servicer is federally regulated to ensure your escrow account does not have too much or too little in the account at any period during the year based upon taxes and insurance available at the time. So an alternative recommendation is to place this in your own separate savings account to be used to pay an escrow shortage if needed.

Please note that if you pay the escrow shortage in one lump sum, it can prevent your mortgage payment from increasing quite a bit, but if property taxes and/or homeowner’s insurance have increased, the escrow portion of your mortgage payment will increase according to the new amounts.

In short, since property taxes and homeowner’s insurance are ever-changing, there is no true way to ever keep your escrow payment from increasing. However, there are steps you can take to ensure you’re protected from over-paying these by shopping around for homeowner’s insurance each year when your policy renews (the insurance broker I recommend will automatically do this for you and make contact with you to review) and if you feel there’s viable reason to dispute your property taxes, you can do this with your corresponding county. Your realtor can assist you with pulling additional information and data to support your dispute with the county.

This depends on when the creditor reports the updated balance or payment to the credit bureaus, but most creditors report once every 30 days so, depending on when you made the payment during this cycle, it often can take as long as 30–60 days. If you have recently made a large payment or paid off a debt, it’s helpful to mention that to your loan officer in case that impacts your qualification.

Since it can take 30–60 days (or more in some cases) for payments to be updated, I do not encourage waiting to apply solely to see if your credit score increases first. In fact, depending on how long the loan has been open, the type of loan, and your unique credit history, paying off a debt may not increase your score or be the best thing to do. Depending on your circumstances, it may be more beneficial to use those funds towards your down payment than to pay off debt. Every situation is unique, so I strongly encourage applying and talking through your plans BEFORE paying off large debts. We can do a “soft inquiry” on your credit to get the information we need to put our plan together.

A “hard inquiry” or “hard credit pull” requires your permission and can impact your credit score, while a “soft inquiry” or “soft credit pull” does not require your permission and does not impact your credit score. A hard-pull credit report will provide a thorough view of your credit history and payment habits including county court judgments, defaulted loans, and previous credit inquiries, while soft inquiries may not include this information. Please note: If only a soft inquiry is done on your credit to establish the preapproval, a hard credit pull will, at a minimum, be required upon going under contract and beginning the underwriting process.

A “hard inquiry” is the only type of inquiry that impacts credit scores and the impact it can have may vary from person to person based upon their unique credit history, but generally it only impacts it by 5 points or less.

A “hard inquiry” will typically remain on your credit history for 2 years, but typically only impacts your score for 1 year.

Many consumers use credit monitoring websites and apps such as Credit Karma, Experian, TransUnion, Equifax, or their credit card companies’ credit score tracking tools to monitor their credit score.

Using these websites is highly encouraged to keep track of generally where your credit score stands, but more importantly to monitor that everything being reported is accurate. However, these are not an accurate representation of the credit score your lender will see when you apply for a mortgage. This is because the credit bureaus (Experian, TransUnion, and Equifax) have different scoring modules used for mortgage financing inquiries. Since a mortgage is likely the largest debt you’re going to take out during your life, the way the credit bureaus determine your credit score is different than when you apply for an auto loan, credit card, installment loan, etc.

There are many factors that impact your interest rate that are unique to your particular situation. For example, your credit score. There are several tiers of credit score “ratings,” each impacting the rate you qualify for, with a 780 or above being the highest tier (i.e., helps lower your rate).

Your down payment. There are also various tiers of down payment ranges that qualify you for a lower interest rate. For example, putting 25% down is actually going to get you a better interest rate than 20% down. (Most people don’t know that! They think 20% is the threshold.)

Your program type. There’s an incredibly wide range of programs, all of which have their own unique interest rate (for example, conventional rates vary from FHA rates).

Type of property. For example, a condo has a higher interest rate than a single-family residence.

The use of property. Primary-residence-use properties will have a lower rate than an investment property, 2nd home, or vacation home.

So, if you have a friend or a family member say “oh, I got an X rate,” please remember that not only is their credit score, income, down payment, loan program, etc. likely a different loan makeup than yours, how long ago they got that rate will make a big difference, because rates change on a daily basis.

There are various ways to do this, but what is an option for you and what the best option for you is will depend heavily on your circumstances and timeframe. There are certain ways you can do this with the appropriate amount of time. For example, increasing your credit score. By taking certain steps, you may be able to increase your credit score and qualify for a better rate or program. Keep in mind, the timeframe this takes will depend on what steps need to be taken, how much that will require you to pay down or pay off, and how long it takes your credit report to be updated.

Another way is putting more money down. As mentioned previously, putting 25% will likely offer a lower rate than putting 5% down.

And finally, “discount points.” (See next section.)

Discount points is an upfront fee you can pay to buy down your interest rate. How much you can buy down your interest rate and how much it costs will vary based upon your loan amount, loan program, and the current market.

One discount point costs 1% of your loan amount, but not to be confused with it lowering your interest rate by 1%. To lower your interest rate by one full percentage point, you may have to pay 2–3 points or more (i.e., 2%–3% of your loan amount).

Whether or not this is something you should do depends on your goals both short-term and long-term. Is a lower monthly payment or lower cash out of pocket more important to you? How many months will it take you to recoup the savings of how much you’re saving on a monthly basis? (That is your “break-even” point.) Do you believe interest rates are going to go down in the near future? And if so, do you plan to refinance? These are a few of the questions we will talk through together to see what’s the best strategy to fit your goals.

Possibly! Refinancing is always an option but will include closing costs each time you refinance, so to reduce the cost but still lower your monthly payment is through a “mortgage recast” explained in the next paragraph. Another way is removing PMI (private mortgage insurance) once your loan balance reaches 80% of the value of the home (for conventional loans. This is not an option for certain programs such as FHA).

You might also be able to lower your payment by locating a cheaper homeowner’s insurance policy.

This is different than a mortgage refinance and is not available for every program, but most conventional loans allow you to apply a one-time, large principal payment and your loan is recalculated or “re-amortized” to reduce your monthly payment. Your interest rate and remaining term remain the same. So, if you have 29 years and 6 months left when you “recast,” your remaining term when the recast is complete will still be 29 years and 6 months. This is a very simple, streamlined process. There is a short document you complete and turn in with how much you want to apply towards your principal, and you pay a $250 (roughly; this cost can vary) one-time fee.

The primary purpose of an appraisal is to determine the value of the home and protect you from over-paying for a home. An appraiser will research a multitude of data including “comps,” which are properties comparable in size, proximity, and features to the home being appraised, including what those homes have sold for within recent history (often in the past 6–12 months).

The appraisal also confirms if the condition of the property meets the loan program requirements. The appraiser will be looking for “safety and soundness” concerns. They certainly will not be doing as in-depth of an inspection as your other home inspections, but they will be looking for things that are obvious concerns, such as exposed electrical wiring, major foundation cracks, mold or water damage, missing flooring (tripping hazard), etc.

This can vary from situation to situation, but typically once ordered, the appraisal inspection report is returned within 1–1.5 weeks.

First, this means you bought the home at a great price! It also means that you’re walking in with instant equity. The sellers are never notified of the appraisal value unless you or your realtor decide to disclose that to them for any reason. Plus, you’re under a legal contract for an agreed-upon price by all parties, so the sellers can’t increase the price solely off an appraisal coming in high.

This will depend on how your contract was written and the terms you and the sellers agreed upon. Some contracts will include an “appraisal gap,” which means the buyers will cover a deficit on the appraisal value up to a certain dollar amount—this is something your realtor will discuss with you before writing the contract. If one was included, you as the buyer will pay the difference between the purchase price and the appraisal value.

If an appraisal gap was not included, your realtor will advise you on the best way to handle it. That could include approaching the sellers to adjust the purchase price, coming to a mutual compromise, or cancelling the contract (if the legal verbiage in your contract allows for that).

The underwriter’s role is to ensure your file meets the requirements for the loan program so that your loan is approved for funding on closing day. The underwriting stage is to cross the T’s and dot the I’s that your income, credit, assets, and property meet the standards for the agency backing your loan. For Conventional loans, this is Freddie Mac or Fannie Mae, or for FHA loans, it’s the Federal Housing Administration. The underwriter will determine what documentation and information needs to be in your file to comply with your loan program’s standards. Even for very well-qualified buyers, it’s very normal to be asked for additional information or documents during the underwriting process.

This can depend on the complexity of each unique transaction, but typically between 2–3 weeks.

This is when a hypothetical purchase scenario is drawn up using estimated details including an estimated purchase price, down payment, interest rate, property taxes, homeowner’s insurance, etc. The buyer’s income, credit, assets, and other qualifying factors are reviewed thoroughly by underwriting to satisfy all the requirements for their loan to be funded on closing day for the specific loan program they are using. Once fully approved, the buyer can place an offer and close in 2 weeks or less instead of the standard 30-day timeframe because the only thing left is ensuring the property purchased meets the necessary loan requirements. Going through the underwriting process prior to going under contract does not obligate them to any specific terms nor obligates them to borrow a certain amount. It’s typically recommended to be fully approved through underwriting for an amount more than you plan to borrow. Because once an underwriter ensures the buyer has the ability to repay a certain amount, they will automatically qualify for anything below that.

To a seller, a buyer who is “fully approved” through underwriting is considered a significantly stronger buyer than someone who is “pre-approved” because it substantially reduces the risk of their financing falling through once accepting their offer. It also allows the closing timeline to be cut in half (or more), and many sellers are eager to close as quickly as possible.

No, you can pay your loan off at any time without a penalty.

Paying semi-monthly instead of one payment per month. Whether or not this is allowed can vary from program to program.

Making one-time additional principal payments can significantly reduce the amount of interest accrued over the life of the loan.

Making an additional $100 principal-only payment each month can save over $50,000 in interest, and pay off the mortgage 4 years early. I can also assist you with amortization calculations to play with scenarios for your specific loan.

An adjustable-rate mortgage has an interest rate that is fixed for a period of time, then adjusts with the market. Most ARMs offer a fixed interest rate for 3, 5, or 7 years, then adjust annually or semi-annually (up or down) with current market conditions. There are minimums and maximum caps set for how high or low the interest rate can go. I will help you assess whether or not this is a good program to consider based upon your specific circumstances. It’s important to understand the risks involved with this type of program versus a fixed mortgage.

Typically, you will have one full month plus any additional days remaining in the current month before your first payment is due. For example, whether you close on January 1st or January 31st, your first mortgage payment will be due on March 1st. You will have the full month of February plus any days remaining in the month of closing without a payment due.

However, the day of the month you close on will impact your total cash due on closing day because it will affect the amount of prepaid interest collected. Part of your “prepaids” include the per diem (daily interest) accrued from the day of closing to the last day of the month. So, for example, if you close on the 1st of the month and there are 31 days in the month, prepaid interest for 31 days will be collected at closing. If you close on the 31st of the month, only 1 day of prepaid interest will be collected.

Your loan can be refinanced at any time but typically, there are costs involved with refinancing (title work fees, recording fees with the county, new appraisal if applicable, etc.) so it’s important we work through the numbers together to ensure refinancing is beneficial based upon your unique circumstances and goals.

This will vary from situation to situation. Despite common myths of golden rules that the interest rate needs to drop by “x” amount to be beneficial, this is going to differ from loan to loan. A 1% savings in rate on a $100,000 loan amount is going to look much different than on a $400,000 loan.

It’s also important to take into consideration the cost for refinancing vs. the savings. When considering these factors, it’s also important to evaluate how long you plan to stay in the home and what interest rate projections are forecasting for the near future.

And most importantly, it’s going to vary based upon each homeowner’s goals. For example, for one homeowner, saving $100 per month on their payment may be worth it to them to refinance. While for others, that could be much more.

All mortgage rates are in .125% increments. For example, 6%, 6.125%, 6.25%, 6.375%, 6.50%, 6.625%, 6.75%, 6.875%, 7%, etc.

$100,000 loan amount = $16 per month (approximate); $200,000 loan amount = $32 per month (approximate); $300,000 loan amount = $48 per month (approximate); $400,000 loan amount = $64 per month (approximate); $500,000 loan amount = $80 per month (approximate); $600,000 loan amount = $96 per month (approximate); $700,000 loan amount = $112 per month (approximate); $800,000 loan amount = $128 per month (approximate); $900,000 loan amount = $144 per month (approximate); $1,000,000 loan amount = $160 per month (approximate).

This depends upon the loan program you qualify for. It also depends on what minimum monthly payment reports on your credit and if any late payments have been reported to your credit. If your student loan payment is deferred or reports a minimum monthly payment of $0, most loan programs will calculate 0.50%–1% of the total loan balance as a minimum payment towards your debt-to-income ratio.

Absolutely! After closing, I will email you a link and payment instructions where you can set up your online account and enroll in auto pay if you wish. You will also receive a payment coupon at closing and will receive payment information in the mail.

No. The ONLY thing we will mail is payment information and any applicable servicing transfer notices. However, after closing, you will unfortunately receive an excessive amount of junk mail. This is because a purchase is considered public record with the county and many companies watch for this information to send solicitations for their services. Typically, these include offers for home warranties, life insurance, and certified copies of title work. Many of them appear to come from Fairway referencing our name but have no affiliation. They may include verbiage like “Urgent!” “Final notice” “We’ve been trying to contact you regarding your mortgage” in an effort to create urgency to call them. You are welcome to send a picture of any mail you receive to me or your realtor at any time to confirm the legitimacy!

Fairway retains the majority of our loan servicing. However, if your loan servicing happens to be transferred, I will always be here as your point of contact for the life of the loan. I will also be the one to personally assist you with any refinances or future purchasing needs. After you’ve done one loan with us, it makes the process that much easier for all future loans!