If you are interested in purchasing a new home, you’ll need to research your financing options. One major part of financing is the annual percentage rate (APR). As you enter into a deal, you will likely know your area’s prime interest rate, but you also need to learn about the lender’s APR.
The APR is the final rate the lender charges you annually. After adding on any loan fees that are involved and points that will be charged, the final rate will usually be higher than the prime interest rate.
When applying for a mortgage, the lender must notify you about the APR within three days of receiving your application. The APR may change before final settlement, but there are limits on how much it can change.
So while shopping for a mortgage, make sure you know the annual percentage rate, as well as what you will have to pay for points, application fees and mortgage insurance.
Being fully informed is the only way you will be able to make the best decision.
Buying a home is a big step and process can be complicated. That’s why it’s so important to have a knowledgeable real estate professional working to protect your interests.
One of the first things you should do when shopping for a home is to obtain prequalification for a home loan. This will help you understand your budget and narrow your home choices.
In order to get a mortgage, you will need to provide proof of income and assets. The amount of necessary paperwork will vary somewhat from lender to lender, but most likely you will need:
- Federal income tax returns for the previous two years.
- If you are self-employed, 1099 forms and year-to-date profit/loss statements.
- Three recent consecutive paycheck stubs.
- Three consecutive bank statements.
- Investment and savings account statements.
- Recent year’s canceled rent/mortgage check or other verification of payments.
- Documentation of additional mortgage loans or rental properties.
- Recent statements from each of your credit card companies.
- Recent statements or other documentation of car loans, student loans and other debt obligations.
- Divorce documents or other legal documentation, if applicable.
If you have questions or concerns, feel free to contact me anytime.
Brian Ripp, CRS, GRI
Broker, Notary, Property Management
Realtor since 1985
DRE Lic. 00886348
If you are purchasing a home, obtaining a loan is a big part of the process. Before you choose a mortgage lender, you may want to talk to a few lending institutions and ask them some questions. Then use the information you gather as a basis for comparing loans and choosing the one that’s right for you. Here are some questions to consider:
What documents will I need to provide? You will need to provide proof of income and assets, but the amount of necessary paperwork will vary somewhat from lender to lender.
How much time will it take to process my mortgage loan application? It typically takes between 30-90 days, however, the actual time will be determined by how soon the lender can receive an appraisal of the property, verify your information, and obtain a credit report.
What is the lowest acceptable down payment? The amount of the down payment will determine whether you need private mortgage insurance (PMI) and will be a factor in the interest rate and loan terms you can receive.
What is the annual percentage rate? Keep in mind that after the lender’s fees are added, the rate may be higher than what you were initially quoted. Ask if you can lock in the rate for a specific time period.
Getting a mortgage is just one step on the road to becoming a homeowner, but with a qualified real estate professional on your side, you’ll achieve your dreams in no time.
Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor
www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.
Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp
