Q And A Buying A House
This ARTICLE On Q And A Buying A House With Julie Hayward Was Written By Julie Hayward
Q and A Buying A House with Gustan Cho and Julie Hayward, President and Managing Broker of Edge Realty LLC and author of OPPORTUNITY KNOCKS. Julie Hayward is a veteran Illinois real estate agent and one of the most knowledgeable and top producing real estate agents in the state of Illinois. Julie Hayward and The Gustan Cho Team work hand in hand in making dreams of home ownership happen to Illinois home buyers. Gustan Cho and The Gustan Cho Team would like to thank Julie on writing this BLOG on Q and A Buying A House. Julie Hayward is an expert in the following counties:
- Cook County
- Lake Country
- Kane County
- McHenry Country
- DuPage County
- Will County
Gustan Cho and The Gustan Cho Team at CrossCountry Mortgage provides home loans for the following:
- Home Purchase
- Cash Out Refinance
- FHA Streamline
- Rehab Loans
- Reverse Mortgages
- Jumbo Mortgages
- NON-QM Loans where there is no waiting period after foreclosure, short sale, deed in lieu of foreclosure
Gustan Cho and The Gustan Cho Team at CrossCountry Mortgage offers perspective and expertise to help first-time home buyers with questions about financing and the home buying process.
Julie Hayward: Author Of Q And A Buying A House
“I’d like to thank Julie Hayward and Edge Realty LLC for giving me this opportunity to offer my expertise as a loan officer to the readers of her new book, OPPORTUNITY KNOCKS. It is always a great pleasure working with Julie. Every home buyer praises the outstanding service that Julie provides. I am always grateful for the great advice I get from Julie when it comes to real estate questions. Special thanks goes to her real estate attorney husband, Chad Hayward, who always goes beyond the call of duty in being available to my loan officers, my borrowers—and me.” –Gustan Cho
Q And A Buying A House: How Do I Find A Loan Officer?
Once you have decided to become a homeowner, the first step to take is to consult with a mortgage loan officer to get pre-approved for a home loan. If you already have been looking at homes, your realtor can refer you to loan officers with whom they have worked and whom they know will be diligent to close on time. You can feel confident in your agent’s recommendation. Real estate agents are extremely selective in referring loan officers and will most often not refer anyone who they have not worked with in the past. Your realtor is the quarterback in the entire process: he or she coordinates all efforts towards closing. If you don’t have a referral from your agent, you can shop online or ask family or friends. You need to be comfortable with your loan officer because the mortgage process can be stressful.
Q And A Buying A House: What Is The First Step In Buying A Home?
The first process in buying a home is to get pre-approved by a mortgage lender. Consulting a mortgage lender and getting a pre-approval letter will not cost you anything and by law, residential mortgage lenders cannot ask for any upfront money except for the home appraisal fee. Credit reporting fees should not be charged upfront. However, if borrowers need rapid rescores done during the mortgage process, a rapid rescore may or may not be charged upfront, depending on the circumstances. Once you have chosen a lender and a loan officer you trust and obtained a pre-approval letter, your next step is to give that pre-approval letter to your realtor. Together you can start shopping for a home and enter into a real estate purchase contract.
Q And A Buying A House: Now I’m Pre-Approved. Can My Interest Rates Change?
The answer is YES. Interest rates can change and your interest rates are not set in stone until the loan officer LOCKS in your mortgage interest rates. Normally, most mortgage loan officers will lock the borrowers’ interest rates after the borrower gets a conditional approval. Loan officers can lock interest rates prior to approval. Before you can lock in any mortgage interest rates, however, you do need to submit an executed real estate contract and your loan has to be registered with the mortgage company. Most interest rate locks are for 15 to 30 days. If your home closing gets delayed and the interest rate lock period expires, your loan officer will ask for extensions. Keep in mind that the longer your lock period is, the more it will cost via pricing adjustments. Locking a mortgage interest rate is like getting insurance: if rates skyrocket during the locked-in period, the mortgage company still needs to give you the locked interest rate. Extensions are not free and do cost money so it is in everyone’s best interest to do everything possible to close the loan on time.
Q And A Buying A House: What Is The Difference Between Pre-Qualified And Pre-Approved?
Remember, most sellers’ realtors will not let you submit a real estate purchase offer without a solid pre-approval letter. When a borrower calls me to get pre-approved for a home loan, I interview the borrower for about 30 minutes. This phone interview process is the pre-qualification process and once I feel that the borrower qualifies, then we move to the pre-approval process. During the pre-approval process, some of the questions asked by your loan officers may include:
- What is the price range of the home you are intending to purchase?
- Do you have an estimate of the property taxes, homeowners insurance, flood insurance if applicable, HOA, if applicable? I can normally estimate the homeowners insurance.
- What is your source of income?
- Are you self-employed or a W2 wage earner?
- Are you hourly or salaried?
- Do you receive social security income, pension income, part time income, overtime income, alimony income, child support income, or other income?
- What is your source of down payment?
- Your loan officer will also ask you about all of your monthly minimum debts, and whether you have any child support payments and/or alimony payments that you need to pay out.
- What is your credit score?
- Your loan officer will ask you about your credit prior to pulling your credit.
- He or she may ask you if you had any bankruptcies, foreclosures, deed in lieu of foreclosures, or short sales. The reason is that there are federal minimum mandatory waiting periods after a bankruptcy and/or foreclosure to qualify for home loan programs.
- Your loan officer will ask you about if you have any outstanding judgments, tax liens, delinquent federal student loans, and outstanding collection accounts.
- You can qualify for a mortgage with outstanding collection accounts and charge-offs without having to pay them off.
- If a mortgage lender tells you that you need to pay off your outstanding collection accounts and/or charge off accounts, that is not a requirement and it is that lender’s own overlay, so you need to seek a different mortgage lender with no lender overlays.
- Your real estate agent can refer you to a lender he or she works with that has no lender overlays.
- Many loan officers make a simple but yet serious mistake where they do not ask about the monthly debt obligations on borrowers of community property states.
- With community property states, HUD requires that the debts of the spouse needs to be counted even though they are not on the loan.
- Credit scores do not matter and poor credit does not matter, but monthly debt obligations, judgments, and tax liens do matter.
- Illinois is not a community property state, however, there are 9 community property states, and our neighbor to the north, Wisconsin, is a community property state.
Once the loan officer deems that the mortgage applicant qualifies, the loan officer will take a four-page mortgage loan application called a 1003 either over the phone, or the borrower can complete it online. With the mortgage loan application, the lender will run credit and once everything matches, the borrower is normally deemed pre-qualified.