Carlos & Olga Arce
The financing information listed below may vary with different lenders, but they provide a good guide for the things to look for, when you decide to pursue a mortgage in the real estate market.
We provide this information free of charge to clients, other realtors and the public at large as a voluntary public service.
- Conforming Mortgage Loan
A fully documented loan will include employment and income verification, assets and deposits verification, along with pay stubs, account statements, etc. They offer the lowest possible interest rates. There are many types of financing and the borrower should compare offers.
- Down Payment
Depending on credit scores, mortgage lenders offer ascending amount of down payment requirements. Most loans however, require 5-20% down payment. FHA offers 3.5% and VA offers 0% for veterans.
- Private Mortgage Insurance
When a loan exceeds 80% of the value of the property (loan to value), banks require a private mortgage insurance policy which adds to monthly payment.
- Credit for closing costs
A credit for closing is money borrowed from the bank, by increasing the amount of the loan above what the seller will receive at closing. The amount of the loan still can not exceed the value identified in the property appraisal. Most banks restrict the credit amount to 6% of the sales price.
- Credit scores
Credit scores are reported by three major credit bureaus, Experian, Equifax and Trans Union. They are the primary basis by which a mortgage lender adjusts the interest rate of a loan.
- Interest rates
Interest rates are set by national banks following market forces. It determines the monthly payment of a mortgage loan. Rates can be lowered by paying points up front, which is referred to as a buy-down.