Will I be able to find out the results of the appraisal?

Home Search Under new rules, home mortgage borrowers now have the right to a copy of the complete appraisal documents the lender used to decide whether or not to approve your loan. You may also see any in-house reports that affected the market value assigned your home.

Send for information.

Your lender may automatically send you a copy, but if not, you have 90 days to write for the appraisal after the lender informs you of the decision on your loan application.

As professionals, we are familiar with the real estate rules and regulations that might have you stymied. We’ll be happy to work with you and help eliminate any confusion about the home buying experience.

If we contract to buy a home for a higher price than the appraisal, can we get our deposit money back if the loan falls through?

Skyscraper Consider adding a clause in your purchase offer that makes your offer contingent upon obtaining acceptable financing. Then, if financing is unavailable to cover your purchase offer because of a low appraisal, you can renegotiate your offer with the seller to meet the appraised price, or find another house.

What is a two-step mortgage?

Ballet Slippers Good news. A two-step loan helps a buyer really dance! Although the traditional 30-year mortgage is still the most widely-used home financing, a relatively new variation on the theme is gaining popularity:

  • The two-step mortgage amortizes the loan over 30 years, but generally starts out at a lower rate than a typical 30-year loan.
  • The rate is lower because after the initial period, the interest rate is adjusted to the prevailing rate for the balance of the loan.
  • The initial step is pre-set for a specific period, say 3 to 10 years, and the second step is the remaining time, generally 20 to 27 years.
  • The lower initial rate makes the two-step loan popular with first-time buyers because monthly payments are lower, but it also helps homeowners buy up to their next home.

With our experience, we can give you tips that will help you through the mortgage maze phase of home buying. Call or e-mail us for information specific to your needs.

How does a “no-cost’ loan work?

Pennies More accurately called a “no upfront-cost” loan, a “no-cost” loan is a mortgage that wraps the closing costs – such as application and credit check fees as well as appraisal and other settlement charges – into the loan amount. These expenses are often paid by including the costs into a larger total loan amount and charging a higher interest rate on the whole loan.

The no-cost loan could be a useful alternative for:

  • someone short on cash, or
  • a homeowner who is refinancing.

Another way to go is to pay the points and any other deductible closing costs in cash at settlement to secure the tax deduction. Usually this also means a lower interest rate, and therefore lower interest cost over the life of the loan.

What do you advise in the event I’m turned down for a mortgage?

Help Wanted If you’re denied a mortgage, try, try again.

Here’s help for renters and other buyers who may have had difficulty getting mortgage money:

  • The Federal National Mortgage Association, or Fannie Mae, a major supplier of mortgage funds, has a program of review, counseling and more flexible loan guidelines. The hope is that this program, called "Showing America a New Way Home," will help loan applicants who might otherwise be rejected for a loan ultimately get loan approval and buy a home.
  • Also worth checking out is the "Fannie 97" mortgage, which lets borrowers make down payments of just 3%
  • The "Start-Up Mortgage" requires a 5% down payment and allows for lower monthly payments the first year of a 30-year fixed-rate loan.
For more information, ask your lender or call Fannie Mae’s public information office at (800) 7FANNIE.

How strict are lenders when it comes to credit standing?

Lenders give some leeway for lateness. Is your credit less than perfect? You may still meet a lender’s guidelines for a mortgage. All credit flaws aren’t equal, and some are overlooked more easily by lenders. The most important items are:

  • All bills are current and have been paid on time for at least two years;
  • Mortgage or rent payments are not more than 30 days late;
  • Installment and credit card payments are not more than 60 days late;
  • Charge-offs are resolved before applying for a loan;
  • Old credit card accounts have been closed out;
  • Any late payments have been explained in writing.