Home
 Residential
Homebuyers
Guide Financing
a Dream
Before you go looking for a home, it's important to consult
a loan officer to determine how you'll finance your purchase.
Gershman Mortgage would be happy to assist you throughout
the homebuying
process. The first step is to get a pre-qualification
or pre-approval letter.
Prequalification vs. Pre-approval
Both pre-approval and pre-qualification increase a buyer's
negotiating power by showing sellers that you are ready and
able to purchase the property. Pre-qualification generally
involves a basic review of an applicant's credit history and
gives a general idea of how much you can borrow. Pre-approval,
on the other hand, involves an extensive credit review and
gives a specific amount the lender would be willing to offer
the buyer. Use our fast online
application to get pre-qualified or call 1-800-GERSHMAN.
Loan Programs
Today, lenders offer loan
programs to meet the needs of a wide range of borrowers.
Fixed-rate
mortgages, which offer stable costs over the life of a
loan, are a popular choice. Adjustable
rate mortgages feature a low introductory rate that fluctuates
at fixed intervals, according to the market. Balloon
mortgages are short-term loans that are not fully amortized
- at the end of the term; the borrower pays the balance in
a 'balloon payment'. There are also a number of special
programs to suit borrower needs, including low documentation,
low down payment, no asset verification, and interest-only
plans, among others. To determine which type of loan is best
for you, use our calculators
or talk with a Gershman loan officer. For more information
on loan options, visit our
loan programs section. Call or e-mail Gershman at any
time if you have questions.
Interest Rates and Points
For a first-time
buyer, rates and points can be confusing. Points are a
way for borrowers to obtain a lower rate by paying a percentage
of the loan amount at closing. To easily compare loans, use
the Annual Percentage Rate (APR), which takes into account
both the interest rate and points and reflects the total cost
of the loan.
Loan Process
Once your offer on a house is accepted, you'll need to apply
for a mortgage loan or, if you've been pre-approved, we
will arrange for an appraisal on your new home.
At Gershman Mortgage, borrowers can apply
on-line, by mail, or in person. Visit the application
checklist for a list of items needed during the application
process. Within three days of applying, you'll receive a Truth-in-Lending
disclosure itemizing the costs associated with the loan.
While the loan is pending, Gershman Mortgage will order a
property appraisal and credit report and verify employment
and account deposits. Private mortgage insurance will be required
if the down payment is less than 20% of the loan value.
Once the loan is approved, title insurance is ordered, the
borrower orders homeowner's insurance, and the closing is
scheduled.
Paperwork
Despite the rise in low paperwork mortgage processing, no
loan can be settled without some paperwork. Many first-time
buyers are overwhelmed by all of the information. Knowing
what to expect before the process begins can help ease that
anxiety. Often, settlement papers can be obtained in advance
of the closing, giving you more time to review them (check
with your Gershman loan officer). Some of the paperwork you'll
see during the process includes:
Truth In Lending Statement-
sent to the borrower within three days of the application
detailing the cost of the loan
Certificate of Occupancy- obtained by the borrower
from the city of residence
Title- shows ownership
to the property; transferred at the closing
Proof of Insurance- documentation from an insurer
showing that the borrower has secured homeowner's insurance
for a specific property
Note- a legal document
that spells out the conditions of a loan and binds a borrower
to repay the loan
Mortgage- a document that
gives the lender a lien on a home as security for a loan
HUD-1 Statement- itemizes
all of the charges associated with the transaction, including
those paid by the seller as well as the buyer
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