Mortgage Q&A – Everything You Need to Know About Mortgages

Have mortgage questions? We have answers! And if the answers you need are not answered below, then don’t hesitate to contact Sam Atapour at PROSPERITY MORTGAGE. He will be more than happy to answer your questions. He can be reached at (703) 980-5443 or sam.atapour@prosperitymortgage.com.

How do I get qualified for a mortgage?
It is best to contact a mortgage professional and complete a full application. This is the only way to figure out what your buying power is based on credit, income and down payment.

Why can’t I just go look at houses first?
Of course, while you can always look at houses without knowing how much buying power you have, it isn’t advisable because you run the risk of looking at (and falling in love with) houses you cannot afford or missing out on houses that may be perfect for you because you don’t realize you can afford them. Knowing your price range will help you narrow your search.

How long does it take to get qualified for a mortgage?
Typically, it will take less than 24 hours to be qualified for a mortgage. While you may be told you can get pre-qualified in only a few minutes, that’s not a full approval.

How do I know how much I can afford to spend?
Once you fill out an application, the mortgage specialist is going to ask for information such as your annual income, debt and amount of funds available for down payment. From that information he will be able to determine which loan program best fits your needs and will be able to show you what your monthly payment options will be.

What if my credit isn’t good enough to qualify? How do I fix it?
There are different factors that go in to credit scoring such as credit limits, amount of debt and timely payment history. If your credit is not good enough, your mortgage specialist will be able to help you with improving your credit history. To start improving your credit history it is always best practice to pay down credit cards, pay off any collection or pending judgments. Pull your credit and go through each item to make sure they are correct, if not, challenge them and have the negative information removed from your credit report. Do not apply for too many credit cards as each inquiry on your credit report will hurt your score.

What happens once I have a house under contract? (from the mortgage perspective)
This is where your mortgage specialist will start collecting documents for the loan file such as disclosures, income and asset statements and will order the appraisal. Once your file has been transferred to underwriting, a commitment to lend letter will be issued by the bank/lender as your final approval document. Once the appraisal results are back and approved by the lender, the settlement will take place.

Who are Fannie Mae and Freddie Mac?
Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs). They are privately owned, but receive support from the Federal Government.

The GSEs provide a secondary market in home mortgages, purchasing mortgages from the lenders who originate them. They hold some of these mortgages, while some are “securitized” — sold in the form of securities which the GSEs guarantee.

Freddie Mac and Fannie Mae are among the largest corporations in the world.

What is a conventional mortgage?
A conventional mortgage is a housing loan that is generally on a fixed interest rate term – although it can also be an adjustable rate – and generally meets Fannie Mae and Freddie Mac’s guidelines. They are called conforming loans since they conform to conventional guidelines set out by Fannie Mae and Freddie Mac.

Who qualifies for FHA and VA mortgages?
Everyone can qualify for an FHA loan as long as the income and credit criteria are met. VA loans are only for Veterans or active duty personnel only. You have to have VA eligibility through VA; you can either contact VA directly to establish whether or not you are eligible and to receive your eligibility certificate or your lender can request it from VA directly.

How do I know which type of loan is right for me?
Your mortgage professional can help you determine which program you can qualify for and best to select from.

How come everyone advertises different rates? In comparing rates, what should I look out for?
Mortgage rates vary from lender to lender, but on most days they will be almost, if not absolutely, identical to one another. Since rates change on a daily (if not hourly) basis, it’s best to check on rates on the same day from several different companies. You can not lock in a rate until you have a ratified contract – and at the time of locking in your rate, its best to check with the lender to make sure they have a free float down option to lower your rate in case rates do go down before settlement.

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