1. Steps To Avoid When Applying For A Mortgage

2. US Mortgage Corporation (NMLS ID#3901). Corporate Office is located at 201 Old Country Road, Suite 140, Melville, NY 11747; 631-580-2600 or (800) 562-6715 (LOANS15). Licensed Mortgage Banker-NYS Department of Financial Services- AK, AL, AR, CA, CO, CT, DC, DE, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MS, MT, NC, ND, NE, NH, NJ, NM, OH, OK, OR, PA, RI, SC, SD, TN, TX, VA, VT, WA, WI, WV, WY State Banking Departments/Regulators. Rates, fees and program guidelines are subject to change without notice. Certain restrictions may apply. Some loans arranged through third parties. First mortgages only. Not all products and/or programs are available in all states. Six Steps To Avoid 3. Table Of Contents Getting Started With The Mortgage Process .................... Page 01 Forgetting To Check Your Credit ............................. Page 03 Withholding Information On The Loan Document ................ Page 05 Putting Money Into Your Account At the Last Minute .............. Page 07 Not Getting A Pre-Approval ................................. Page 09 Not Shopping Around For The Best Deal...................... Page 11 Changing Your Job....................................... Page 13 4. Getting Started Mortgage Process With The www.usmortgage.com www.usmortgage.com 01 5. Buying a home on a mortgage is not a small decision. It can take a lot of time to get one. Getting all the paperwork done, while following all the rules and regulations, can be complex for some. Since it a very important decision (at least on a financial level), it only makes sense to jump into it carefully. In this document, we are going to discuss six common mistakes that mortgage seekers make and how you can avoid them. Have these documents ready: Before you meet lenders or mortgage brokers, you must collect the documents given below. A list of credit cards, that you are using, and the balance due to them. Payroll stubs from six months Tax returns filed for last two years List of all assets like securities, IRA accounts, personal property, bank accounts, furniture, and jewelry. List of residencies and employment for the past two years. Copies of documents such as student loans, bankruptcy discharges, divorce decrees, child support, or alimony obligations. Take your check book when you go to apply. The lender may ask for application, appraisal, and credit check fees. You wouldnt want to cause delays in your loan processing. Getting Started With The Mortgage Process www.usmortgage.com www.usmortgage.com 02 6. Forgetting To Check Your Credit 03 www.usmortgage.com www.usmortgage.com 7. Before you start looking for a company or a bank that will give you a home loan, you should take a look at your credit score. Do you know that a credit score on the worst side can get the interest rate (percentage) on your mortgage to rise by several points? The worst case scenario could potentially result in your application getting rejected. Make sure that you know your credit score early (preferably several months earlier) so that if you must make changes to make it attractive again, you can do so. Dont apply for other credit before the application process is complete: On a similar vein, make sure that you dont apply for other kinds of credit till the application process for the mortgage is complete. If you apply for any other kind of credit, like an auto loan or a new credit card, while you are seeking a mortgage, there is a chance that you will be seen as a high credit risk. This could prevent you from getting the mortgage or even lead to an increase in the interest rate if you do. Note that a mortgage is a chance to verify personal details that you may have forgotten. Dont remember your credit score? Pull one out. If youveforgottendetailsofyourpastemployment or if you dont know your exact debt, go into your filed records and dig out the answers. This will not only save you work later but will also acquaint you with your personal finances. Forgetting To Check Your Credit 04 www.usmortgage.com www.usmortgage.com 8. If you withhold any personal and/or detrimental credit information, you could end up jeopardizing your transaction and even your chances of securing the mortgage. You should always be honest and open about your finances. Also, note that any information such as pension plan, health plan contributions, outstanding debts, and even bankruptcy filings can be verified. By withholding or giving wrong information, you will be committing mortgage fraud. Also, never ever give false information about your taxes. Provide documents as soon as you can: Many prospective borrowers, when they are asked for additional documentation, get back days later. This is a waste of time and it can cost you a lot of money if the rate that you managed to get locked-in expired (and in the meanwhile has risen). When you are getting a mortgage, you have to do whatever you can to help with the loan process, including providing documents on time. Withholding The Loan Document Information On 05 www.usmortgage.com www.usmortgage.com 9. 06 www.usmortgage.com www.usmortgage.com 10. Putting Money At The Last Minute Into Your Account 07 www.usmortgage.com www.usmortgage.com 11. Putting Money Into Your Account At The Last Minute The mortgage company or the bank would want to see if you really are capable of paying the mortgage every month. But if you dont have seasoned assets (money that has been deposited in your account for a few months at least), your application can end up being rejected. Some borrowers think that they will transfer some funds from a friends or a relatives account a few days before they apply for the mortgage, but it wouldnt hold when the trail is uncovered by the underwriter. Dont make deposits that are unusually large into your account, especially when you are just going to apply for a mortgage. When scrutinizing loan applications, lenders like to see some stability in income sources and other funds which can potentially support mortgage repayments. Lenders and banks may get suspicious (the federal government even gets particularly interested) when they see that a large sum of cash is being deposited into an account, especially just before a mortgage application. Your deposit or transfer will be entirely legitimate. Nevertheless it will lead to questions. It could even trigger IRS audits. So, if you are going to make a large deposit or a transfer, you will have to be ready. Not only will you need to answer questions about the transactions, you will also have to furnish documentation. Always note the entire housing payment: Mortgage payments will consist of the PITI - principal, the interest, taxes, and the insurance. Many would-be home buyers make the mistake of not including the insurance premium and property taxes in their mortgage budget. To see if a prospective borrower qualifies for a mortgage payment, the debt-to-income ratio is used. This ratio is determined when the proposed PITI cost is divided by the monthly income (gross). For example, when a homeowner takes a $2400 insurance policy on his or her home, $200 will be added to the escrow. Never close under pressure. While you wait, it may cost you money but if you make a mistake when you close, you will end up losing more. Ask for answers, get things right, and only go ahead with the loan when you are satisfied. 12. Good mortgages come with good preparation. Before you start house hunting, make sure that you are actually qualifying for the mortgage loan. You can do this by getting pre-approved. Mortgage pre-approvals are more robust compared to pre-qualification checks because the lender or the bank will first pull your credit score and look at your assets, income, and employment. In a pre-qualification check, the lender will only make an estimate of the mortgage that you are eligible to take. In pre-approvals, you will be given a go ahead based on your earlier finances. What loan amount you will be able to afford will not be based on estimates but hard numbers. The DTI ratio (debt-to-income) will also matter when you want to know what mortgage payment you will be able to exactly afford. When you get pre-approved for the loan, you can ask for a written commitment that the lender will finance your mortgage. This will show your home seller that you are serious about purchasing the house. Dont chase loan programs that are exotic: You should certainly look around for the best terms, low closing costs, and better rates, but dont do it just by getting lured by exotic loans. If you hear something that sounds too good, then it likely is. Sometimes the monthly payment is too low. Here you might be paying only the interest. It is even possible that your mortgage negatively amortizes (your balance in the mortgage grows every month). It is in your best interest to keep the mortgage simple. Take a mortgage that you can easily understand, like fixed rate mortgages. A Pre-Approval Not Getting www.usmortgage.com www.usmortgage.com 09 13. 10 www.usmortgage.com www.usmortgage.com 14. 5 Not Shopping Around For The Best Deal 11 www.usmortgage.com www.usmortgage.com 15. Not Shopping Around For The Best Deal Just because one lender or a bank has pre-approved you, it doesnt mean that you have to take your mortgage from them. Make sure that you inquire around with various lenders and banks. You can even take help from a mortgage broker. Mortgage brokers bring mortgage seekers and lenders together. In some areas of the world, more than direct sales, mortgage brokers bring banks and lenders business. Mortgage brokers can look into the rates offered by various financial institutions and get you lowest rates on excellent terms. Dont end up being one of those people who obtain a single rate before they apply for the loan. Shopping for a mortgage is just like shopping for other things. You would look around and try to find the best rate possible, wouldnt you? Also, dont forget that you have to factor the closing costs as well! Dont forget to lock the rate: You should not forget that mortgage rate means little if you dont lock it in. If you are happy with the rate you are getting, you should lock it in. Mortgage rates will change everyday, even several times in a day. All the mortgage quotes that you got from lenders, banks, or brokers will be just quotes unless you lock in. Once you lock the rate, you are guaranteed that the rate will be available to you until a given period, say seven days, fifteen days, and even a month. But you should never assume that a rate has been locked for you unless you get the rate in writing! 12 www.usmortgage.com www.usmortgage.com 16. Changing Your Job To get a mortgage approval, another key criterion is steady income and employment. The underwriter, who works on your application, will be interested to know you are holding a steady job and that you get a consistent income every month which will continue in the future (at least the foreseeable). Avoid job-hopping before you apply for the mortgage. If you are making a job change, it shouldnt be a problem but a change in career can cause problems. If you are considering jumping ship, wait till the mortgage has been closed first. Read the loan documents carefully: Finally, before you sign on the dotted line, you are responsible for reading and accepting the terms on your mortgage. It can be irritating when you have to read all those documents before you sign them, but dont forget that it will be more painful when you realize that you signed up for a clause that you dont want or you dont agree with. Before you sign, you should set aside some time to understand all that is written on the documents and only then agree to it. Dont forget that you can ask questions, it is your right! Otherwise, you will end up paying for a loan where the terms are predatory or which you are unable to pay off. 13 www.usmortgage.com www.usmortgage.com 17. 14 www.usmortgage.com www.usmortgage.com 18. Mortgage Process Now You Are Ready For The 15 www.usmortgage.com www.usmortgage.com 19. 16 www.usmortgage.com www.usmortgage.com 20. Maria Amalia Arrua Mortgage Loan Originator NMLS #851361 201 Old Country Road, Suite 140 Melville, NY 11747 Office: (631) 750-0565 Cell: (516) 554-7272 maria.arrua@usmortgage.com www.usmortgage.com 1994 2014