My Name is Mike Zweig and I'm Here to Help You Obtain
the Best Possible Home Loan for You and Your Family

Frequently Asked Questions

• What type of loan will be best for me? A good lender can point out other loan options you may not be aware of.
• What will my closing costs be? Ask your lender for a Good Faith Estimate providing a general summation of the fees that will be required of you at closing.
• Will I be charged points? Sometimes a loan is only available if you pay points, so ask your lender if the loan quoted requires points.
• What items must be prepaid? Your lender should let you know what items, such as property taxes and insurance, that may be paid in advance.
• How long will I be guaranteed the quoted interest rate? This is called "locking in" a rate. Ask your lender if the rate for your loan can be locked and how long your rate can be reserved and if there's a fee involved.
• How long will the approval take? This varies, so get an estimate, especially if you're on a deadline.
• Does the loan have a prepayment penalty? If you think you may refinance or pay off the loan early, you should ask if there's a fee involved for doing so. Generally speaking, sub-prime loans all have prepayment penalties. Sometimes, these penalties can be reduced or eliminated by paying more points, higher interest rates, or a combination of both. A knowledgeable loan officer can help you sort this out.

By opting for a shorter term, you may can thousands of dollars in interest, not only because you'll be paying off the loan sooner, but lenders generally offer better interest rates on shorter-term loans. And though your payment will be more each month, it may not be as much as you may think. The grid below illustrates the savings on a $100,000 loan at 8.5% interest.

Lenders look at three criteria: debt ratio, loan to value, and credit.

Every situation is different. Once you submit your loan application online, you should receive a customized list of the documents you'll need to provide.

There are special loan programs that include low documentation or even no documentation. As you visit with your loan officer, he or she will be able to determine the very best loan for you, oftentimes based on the documentation the loan officer knows you are capable of providing.

Your monthly payment is the sum of four factors, commonly referred to as PITI (Principal, Interest, Taxes, Insurance). You may also be required to pay PMI on a monthly basis (unless you have an interest-only loan, in which case you may only pay interest).

• Principal - The amount of the payment that is applied to the loan balance.
• Interest - The charge paid for borrowing money.
• Taxes - Property taxes. May also be paid separately to your local government.
• Insurance - Lenders require you to maintain adequate insurance to protect your home. This also may be paid separately.
• PMI (Private Mortgage Insurance) - Sometimes required for loans that exceed 80% of the value of the property

Depending on your credit and the loan amount, you may be able to get a home with 0% down. However, the more you put down, the lower your monthly payment will be.

Closing costs generally add 1% to 2.5% to the final bill. You'll be asked to provide the downpayment and closing costs in the form of a cashier's check at closing.

Instead of paying large lump sums to cover the costs of homeowner's insurance and property taxes, these payments are divided into installments which are paid to the lender monthly along with your loan principal and interest. The lender will hold the money in an impound/escrow account and make the payments from the account when they are due. Impound/escrow accounts may be optional, or they may be required by the lender depending on the location of the property, the size of the loan in relation to the value of the property, and the loan type.

Homeowner's insurance is designed to protect your home. It is also known as hazard insurance, or fire insurance. While the lender requires this coverage, you determine which insurance company will carry the policy. Homeowner's insurance premiums are either paid directly to the insurance agency or by your lender through an impound/escrow account.

This can occur with flexible-payment loans which allow you, at times, to choose to make a payment that is lower than the monthly interest you incur. The difference in interest is then added to your loan balance. This is called negative amortization. Sometimes this increase to your loan balance can be diminished by making by weekly payments. If the value of your home does not increase, the amount of equity you have in the home decreases. However, this type of loan allows you to qualify for more home because the initial payments are substantially lower than those associated with a fixed-rate mortgage.

Soon after your loan is approved, your loan officer will send a list of documents you'll need to bring to the closing. If this is a purchase, before closing you should conduct a final walk-through of the property to make sure all repairs and construction work have been completed, that there's no new damage, and anything meant to be sold with the home is still in place.

At the closing itself, you'll sign final documents. This can often be in the comfort of your own home.

Here are some tips that could save you a lot of time, money, and problems.

• Plan ahead. Establish good credit and save as much as you can for the down payment and closing costs.
• Get pre-approved online before you start looking. Not only do real estate agents prefer working with pre-qualified buyers, you'll have more negotiating power and an edge over homebuyers who are not pre-approved.
• Sit down and figure out what you can really afford. Oftentimes, figuring out all your bills including revolving debt, utilities, food, clothing, etc., and then comparing these items against your total expenses of owning a new home can be beneficial. Our online calculator and free eBook can help you figure monthly payments.
• Know what you really want in a home. How long will you live there? Is your family growing? What are the schools like? How long is your commute? Consider every angle before diving in.
• Make a reasonable offer. To determine a fair value on the home, ask your real estate agent for a comparative market analysis listing all the sales prices of other houses in the neighborhood.
• Choose your loan (and your lender) carefully. For additional tips, read our free eBook.
• Consult with your lender before paying off debts. You may qualify even with your existing debt, especially if it frees up more cash for a down payment.
• You may want to consult your lender if you plan on switching jobs. Sometimes, if there's a career move in your future, you may want to make the move after your loan is approved. Lenders tend to favor a stable employment history.
• Don't shift money around. A lender needs to verify all sources of funds. By leaving everything where it is, the process is a lot easier on everyone involved.
• Don't add to your debt. If you increase your debt by financing a new car, boat, furniture, or other large purchase, it could prevent you from qualifying.
• Timing is everything. If you already own a home, you may need to sell your current home to qualify for a new one. If you're renting, simply time the move to the end of the lease.

This depends on two things: your comfort level and the lender's approval. If you're young and upwardly mobile, you may feel comfortable stretching to afford a bigger home, knowing that eventually your increasing income will make the payments easier as time goes by. But if you're older or retiring soon, you may want a lower mortgage payment that won't require as much of your income.

The lender, on the other hand, will be looking at your credit rating, your income, and other factors to determine how large a mortgage you can support.

If your question wasn't answered, contact Mike Zweig or read the free home loan eBook.