Frequently Asked Questions
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What is the IRS Form 4506 and 8821?
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These are forms that allow your prospective lender to receive an
electronic abstract of your tax returns and/or to obtain a Credit
Report.
This is only for the purpose of retrieving Information from the
IRS or a credit agency. It is used to verify employment and/or show
assets verification.
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What Kind of
Down payment
Will I Need?
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You can put as little as five per-cent (5%) down. Largely, the down payment is based upon the lender's approval conditions.
For example: if your credit is in the low range, a lender will
require a larger down payment before offering you a lower, more
reasonable rate. In such a case, you should prepare to put up to
fifteen per-cent (15%) down.
The down payment must be well documented. Provide two months bank
statements to show that the monies are well established.
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What is "pre-qualifying" and what is the benefit?
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Pre-qualifying is a process that "gets your foot in the door."
To pre-qualify, contact a
loan officer
and tell them what kind of loan your looking for, how much you want
to borrow, the purpose of the loan, etc. Be prepared with as much
information as you can about the property in question.
Your loan officer will then contact an underwriter and submit the case file to
them. The underwriter will view the given material and either approve
the loan at the conditions requested, or let you know the best
offer they can provide.
Be aware, that in
today's
Mortgage Industry, many loans are submitted
by Automatic Underwriting Systems (AUS), and can be done by your
loan officer.
The lender would then give you (the borrower) a "Pre-Qualifying
Letter." This letter is of considerable value to a Realtor
and/or Seller, as they want to close a deal as quickly as
possible, and you are showing your true interest in pursuing the
purchase of a home.
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Is My Loan Going to be Sold?
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Yes. There is always the possibility of your loan being sold.
Included in all application and loan document packages is a
disclosure form, the RESPA Servicing Disclosure, that tells you
by what conditions your loan can be sold. Read the form carefully
to understand its entirety.
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What
if the Lender, or someone they sell my loan to, goes out of
business?
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Another question on this level is, "If the lender, or current
institution holding the Note, goes out of business, or becomes
insolvent, will I be forced to pay my loan off early?"
Answer: No.
If the ownership of your loan is transferred due to failure of
the lender, your loan is governed only by the Note and Deed of
Trust you sign. Your Note cannot be modified or accelerated as a
result of said failure.
In turn, your loan will likely be placed into a Mesne (or
Multiple) Assignment, and sold to a new lender (which will now be
the Beneficiary).
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Do you have any other questions that we could answer?
Tell Us
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