First Step
After you have found your new home in Mount Lebanon, Pennsylvania, you need to find someone to assist you with mortgage selection so you can purchase this house. A knowledgeable loan officer will be able to guide you through the loan process from beginning to end. Soon you will be handed the keys and you and your family will be preparing to move.
How Do I Qualify for a Loan?
You will be responsible for filling out a loan application, along with providing both personal and financial information. This information will include your employment history, pay stubs, credit history, tax records, bank statements, and current housing costs. All of this information will help determine how much you will be allowed to borrow, what interest rate you will get, and the duration of the loan.
Mortgage Types Available
After the amount of your mortgage is determined, the next step is to choose a mortgage type. Your loan officer will be able to explain the various mortgage types and assist you in selecting the one that is right for you and your family. Common mortgage types include fixed rate, adjustable rate, balloon, and interest-only.
● Fixed rate mortgages have the same interest rate throughout the duration of the loan. Your mortgage payment will be the same amount every month. Typical loan durations are 15 or 30 years.
● Adjustable rate mortgages have interest rates that can change at predetermined intervals. These are usually 1, 3, or 5 years. Your mortgage payment will go up or down at these times, depending on the current interest rate.
● Balloon mortgages have low interest rates throughout the duration of the loan but the loan has to be paid in full in 5 years. This can be done with a lump sum payment or by the sale of your house.
● Interest-only mortgages allow you to pay the interest on the loan for the first 10 years. At that point the principal is added in and your mortgage payment will rise.
What about Refinancing?
If you already own a home in Mount Lebanon, Pennsylvania, you might want to look into obtaining a refinance loan. Refinancing is a great idea, especially if the current interest rate is lower than the interest rate you have on your existing mortgage. Lowering your interest rate will lower your mortgage payments. You are actually getting a new mortgage when you refinance, so you will have to go through the same loan process as mentioned above. The money you save by refinancing can be used for unexpected medical expenses, education costs, remodeling, or even for a family vacation.
Home Equity Loans
Another option existing homeowners can pursue is using the equity they have earned in their homes to qualify for home equity loans. This loan can either be in the form of a lump sum or a line of credit. You only will pay interest on the money that you borrow. Home equity loans usually have durations of 10 to 15 years. You will be free to use this money for whatever purposes you need such as credit card bills, home repairs, or a new car.
Final Step
The final step in the loan process is closing. Be prepared for an hour long meeting. You will be asked to sign many documents multiple times. These documents will include:
Truth in lending statement: This document will disclose the interest rate, the annual percentage rate, and the total cost of the loan. This document needs to be checked and double checked before you sign it.
Monthly payment letter: This document shows the actual amount of the principal, interest, taxes, and insurance. This document also needs to be checked before signing.
Note: When you sign this document you are borrowing the money and agreeing to pay it back.
Mortgage: Signing this document allows the bank to foreclose if you fail to pay the bank back.
Itemization of amount financed: This document summarizes the finance costs.
Anticipate signing required real estate documents at this time too. The last thing you will do at closing is hand over your certified check for the closing costs and down payment.
Contact our office today to discuss your lending needs with one of our experienced loan officers.
