MORTGAGE FACTS FOR MARYLAND AND NORTHERN VIRGINIA HOME BUYERS

Buying real estate in Maryland and Northern Virginia and getting a mortgage loan is complicated. The Contract of Sale is about 10-15 pages on Northern Virginia and in Maryland may be up to 30+ pages with the Contract and necessary locality, inspection, loan addenda. Your Buyer's Agent will review the Contract of Sale and all addenda when you prepare your offer to the seller.

Real estate in Maryland and Virginia is expensive compared with many other areas in the United States. Buying a home and getting a mortgage loan, in Maryland or Virginia is even more complicated when home buyers don't understand the home loan process. We'll try to make is as easy as possible. However, borrowing Thousands or Hundreds of Thousands of Dollars is not a minor matter. Borrowing money is a very serious matter and we treat it as such. With some education and guidance from an experienced real estate agent, mortgages can be made easy to understand. We can help. We sell many homes every year and we help our real estate buyers with the mortgage process from pre-qualification through settlement.

We will describe the mortgage process further down this page, but first, you should understand what a mortgage is and how it works The procedure will vary little from lender to lender, but since the procedure is basically simple, you just need to understand that:

• Lenders lend large amount of money.
  
• Lenders want to lend to folks who will repay the loan.
  
• Lenders secure their loan to you with a lien against your property.
  
• If you pay your monthly mortgage payment, every thing is fine.
  
• If you default, the lender will foreclose the property.
  

Sounds simple and it can be simple with an agent who will explain the loan process to you step by step. Unless you've obtained a mortgage loan in the past, most buyers do not understand why lenders need particular information.

WHAT EXACTLY IS A POINT?
Points are pre-paid interest. When a lender quotes a interest rate, they will quote one rate for a loan with no points, or pre-payment, and a lower interest rate if you pay points. Each point is one percent (1%) of the loan amount. It's that simple. You pay points to reduce the interest rate on your loan which reduces your monthly mortgage payment.

WHAT KIND OF DOCUMENTATION WILL I NEED FOR MORTGAGE APPLICATION?
Generally, the documents needed will verify your income and debt. The list below is the minimum for VA, FHA and conventional loans.

• Past two years W-2 Forms
  
• Current address
  
• Employment addresses
  
• Recent bank statements
  
• Name and address of current creditors
  
• Social Security numbers
  
• Certificate of Eligibility for VA buyers
  

If you are self employed, you will need two years tax returns and sometimes a profit and loss statement, simplified. Don't forget, your agent will be available for consultation when you have a question. Relax and enjoy your home search.

Your lender will have a copy of the Contract of Sale for the home you are purchasing. Your lender will process the loan and have the mortgage approved prior to the date of settlement date in the Contract. The lender will send the proceeds of your home loan to the settlement company along with instructions to the title company about what charges are and the title company will conduct the settlement meeting. You sign the documents accepting the loan, the sellers signs the deed over to you, you get the keys to your newly purchased home.

Now, wasn't that easy??

Copyright 2000 Lenn Harley