Mortgage Basics 101 – The Basics (I of III part series)

Mortgage 101: First in a 3 Part Series. PART 1 – Mortgage Basics
Whether you are a first time home buyer or a seasoned home buyer, if you follow these very simple guidelines, your purchase experience will go smoothly.
The single biggest mistake a buyer can make is to not get pre-qualified before submitting an offer. Why? Several reasons. First off, the seller will not take your offer seriously because he/she doesn’t know if you are for real. You may not qualify for the property. As a matter of fact, the seller may ‘REFUSE” to even look at your offer. If it’s a home you really like; by the time you do get qualified, the seller may have already accepted another offer from a ‘qualified buyer.’ Secondly, until you are pre-qualified, you really have NO IDEA of how much you will qualify for. You may be looking at homes priced out of your range; or worse, may have let some great properties get away from you because you thought you wouldn’t qualify for that price range. So again, GET PRE-QUALIFIED the moment you decide you want to house hunt.
SECOND: Do you think that the lowest quote you get from a lender will be guaranteed? NO! Many unscrupulous lenders will quote you a rate that is impossible for them to deliver so that you choose their services. Once you are too far along in the deal and can’t back out because no more time is available for you to switch to another lender, the “REAL” rate will be given to you. So the bottom line, try to get a referral from someone you know and/or interview a few lenders. Note: “Size of a lender doesn’t automatically mean they are the BEST!
Finally, rates change daily. So even if your lender quotes you today’s rate, it’s no guarantee that rate will be available at the time your loan ‘locks’. (More on this later). That said, the rate at closing should be fairly close to what was quoted. If it is far different from what you were quoted, then YOU were given a teaser quote from the get go to secure your business.
THIRD: The rate that is quoted to you is based on verbal questions the lender will ask you and “IF” what you say to the lender about your finances, job, credit rating, etc., is any different than what the written information gathered reveals, then YES, you can expect your rate to change. Mortgage rates are based on several factors & until your lender actually has written confirmation about all of your finances, credit, job, etc., a “TRUE RATE” cannot be given.
FOURTH: The VERY FIRST TIME you meet with the lender of your choice, have ready to provide him with copies of: Taxes (last 2 years), Current pay stub (last two current stubs), Employer’s and Landlord’s address. These are “MUST” items your lender will need in addition to pulling your credit report. Having all this ready at first meeting will shave off at least 5 to 10 days from your processing & help you to close on time.
Next Blog: 1-17-13 – Mortgage Basics / PART II – Fixed or Adjustable Loan?

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Charles Sant'Angelo is a broker of 20 years with offices in the same Beverly Hills location. He has represented residential & commercial buyers & sellers in LA, Orange, Riverside & San Bernadino counties and as far away as Costa Rica. Whether you are a local or global 1st time buyer , a seasoned home buyer/seller or an investor, you will find that his professionalism & his 'Customer First' approach is the cornerstone to how he conducts business. Please visit our "About Us" page for more information or contact Charles direct at
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