What’s the first thing I should do?

The idea of purchasing your first home is bound to bring many questions to mind. This is a natural reaction, as it is one of the biggest decisions you will ever make in your life. Rest assured our team is here to assist you in understanding the loan process with our goal being to make your experience a pleasant one.

Get a mortgage approval letter

Before you go shopping for anything, you need to know how much money you have available to spend. Shopping for a home is no different. Your Mortgage Banker can help you determine how much home you can afford, and put it in writing via a mortgage approval letter. Even if the first thing you do is contact a real estate agent, which many people do, the agent will most times insist you have mortgage approval letter so they know which price range of homes to show you.

Seeking complete approval for financing prior to making an offer on a property is a sound strategy that can help you get the best deal possible, especially if you plan to make a minimal down payment. The seller is often leery of the stability and reliability of the buyer if the buyer is only capable of making a down payment of 10% or less. This can cause you to lose a significant amount of negotiating ability, by being perceived as a weak buyer rather than a strong one. This is why it is very important to get full loan approval in advance and provide a written confirmation of the loan approval when an offer is made. Then you will be perceived as a cash buyer.

Get a real estate agent

The process of finding a home can often be more complex than you may expect. With the help of a real estate agent, you can be assured that you will receive the best service with far less hassle and worry than doing it on your own. If you don’t already have an agent, we work with many of them daily, and can certainly recommend any number of them to you.

Your real estate agent:

• Listens to your wants and needs to find the perfect match between what you can afford and the home that best fits your needs.
• Accesses, by computer, all of the properties for sale in your desired area. “For Sale” and newspaper ads are not always a true reflection of everything that is on the market. Your real estate agent knows everything that is available at a given time.
• Helps you negotiate. Once you’ve found the home you want to buy, your real estate agent will write up your offer and present it to the seller. This gives you the best opportunity to have your contract accepted.
• Gets the price right. Your real estate agent is a specialist who knows the market inside and out so you will get the best price possible.
• Allows you to make your own decisions. A professional agent works for you and respects your opinion. They will not try to force you into a decision you don’t feel comfortable with.
• Helps protect your rights. Real estate laws have become increasingly complicated. Therefore, your real estate agent is there to assist you in every way.
• Does not charge you anything. Your real estate agent’s services are absolutely free to you – the seller pays their commission.

Mortgage terms

To understand the mortgage process, you need to know the lingo. Here are some of the terms you’ll want to be familiar with:

Amortization

Means of loan payment by equal periodic payments calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance.

Annual Percentage Rate (APR)

The interest rate that reflects the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan, however all lenders do not calculate APR the same way.

Discount Points

Prepaid interest assessed at closing by the lender. Each point is equal to one percent of the loan amount, i.e., one point on a $100,000 mortgage would cost $1,000.

Earnest Money

Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.

Index

A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other

investments (such as one-year, three-year, and five-year US Treasury Security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average Costs-of-Funds incurred by savings and loans) which is then used to adjust the interest rate on an adjustable mortgage up or down.

Margin

The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate.

Origination Fee

The fee charged by the lender for issuing a loan; usually computed as a percentage of face value of the loan.

Title Insurance

A policy usually issued by a title insurance company, which insures a home buyer against errors in the title search. The cost of the policy is usually a function of the value of the property, and is often borne by the purchaser and/or seller.

To most Americans, home ownership represents “the good life” and is considered the American Dream. At Atlantic Bay we agree, and believe that one of the most basic human needs is the feeling of security. Of course there is no better symbol of security than owning a home. Unfortunately, many people do not realize how easy owning a home can be, or that they can afford to buy a home.

If you think that you need $10,000?$20,000 to buy a home, then we are here to help. Recently a couple was referred to us who were in the process of planning and paying for their wedding. They were so excited about the big day, and wanted to start their new life together in a brand new home that they could call their own. They were frustrated because everywhere they went everyone told them they needed at least a 5% down payment, and because of the wedding, they just did not have it. They both had good jobs but the wedding had gotten larger than they had expected.

We sat down with them and went over their goals and found out what was important to them. We showed them how they could buy a new home, in a great neighborhood, with one of our zero-down home loans. The seller of the home they found was even willing to pay the closing costs, so they only came out-of-pocket with a few hundred dollars. They were ecstatic!

We are here to help you and your friends and family achieve your dreams, just like this couple. Atlantic Bay still offers four home loan products that allow financing up to 101.5%. Our mortgage bankers are here to help you through the entire process from start to finish and be your Mortgage Consultant for Life. Contact us today for a free consultation on your personal situation.

At Atlantic Bay Mortgage Group we feel that the relationship is just beginning when you purchase a home. The genuine care and consultation of our clients is our highest mission and we want to be your Mortgage Consultant for Life.

Right now you could be paying hundreds or even thousands of extra dollars in interest every single year with your current mortgage. With this hard-earned money you could be building additional equity in your home, growing your personal savings or taking a well deserved vacation. We make the process of lowering your interest rate as easy as 1, 2, 3. Our mortgage bankers will walk you through the entire process and keep you informed every step of the way.

Along with just lowering your interest rate, it may make sense to look at using the equity in your home to pay off high interest credit cards, remodel/update your home, diversify your investments or purchase an investment property. With just a few minutes of your time our qualified mortgage bankers would be glad to look at your current situation and advise you on how your mortgage can work to help you accomplish your goals.

Our team of mortgage bankers wants to make sure that you do not miss out on any savings opportunities. We will monitor your loan daily against current rates and conditions and notify you if you can benefit from refinancing your home loan. We will also contact you annually for a mortgage “check up” to see if your loan is still meeting your current and future financial goals.

Whether you are looking to refinance now or have questions about if this is the right time, our team is here for you. Contact us today for a free mortgage analysis of your current situation.

Because of your honorable service to our country, Atlantic Bay Mortgage Group and the Department of Veterans affairs wants to help you purchase or refinance your home with a VA-Guaranteed Home Loan.

The main purpose of the VA home loan program is to help veterans finance the purchase or refinance of a home with favorable loan terms and at an interest rate which is usually lower than the rate charged on other types of mortgage loans. For VA loans the term “Veteran” includes certain members of the Selected Reserve, active duty service personnel and certain categories of spouses.

One of the great benefits of purchasing a home with a VA home loan is that you can receive 100% financing (zero down payment), no monthly mortgage insurance and competitive interest rates. Borrowers have the option to receive closing cost assistance from home sellers to pay all closing costs and even some consumer debt. These loans also have no prepayment penalty, flexible qualifying guidelines and are more lenient on credit scores.

The VA home loan allows eligible borrowers to refinance their current VA home loan and lower their rate with no qualification of credit, income or assets, no appraisal of value on the home and limited paperwork. Borrowers may also be eligible to take cash out of a property ­up to 90% of the value, with full qualifications.

Even if you have purchased a home before with a VA home loan or you currently own a home with a VA home loan on it, you may be eligible to buy another primary residence using a VA home loan.

Another great feature of a VA home loan is that the maximum loan amount with no down payment is $417,000 (some exceptions may apply depending upon the location of the home). Loan amounts can exceed $417,000, upwards to over $1 million, with a down payment on the property. Contact an Atlantic Bay Mortgage Banker for more information on VA home loans and a free pre-qualification on how much you could borrow for a new home.

What is a Reverse Mortgage?

A Reverse Mortgage is a loan that enables senior homeowners to convert part of their home’s equity into tax-free income.

How do I qualify?

You do have to:

• be a homeowner 62 or older
• be living in the home as your primary residence,
• have equity in your home.

You don’t have to:

• be debt-free,
• own your home free-and-clear,
• sell your home,
• give up title,
• make monthly mortgage payments,
• have a qualifying income level,
• have a qualifying credit score.

Sounds too good to be true. How is this possible?

Your home’s appraised value, and the amount of built-up equity you have in it, is used as collateral for a Reverse Mortgage loan. That makes it a low-risk loan for the lender, and explains why qualifying is so easy for the borrower. In a sense, you’re reversing the flow of money that you’ve been investing in your house all these years, hence the name Reverse Mortgage.

How much does a Reverse Mortgage cost?

Many of the same costs associated with a regular mortgage apply to Reverse Mortgages. In most cases these costs are capped and may be financed as part of the loan, so that you incur little out-of-pocket expense. Remember though, that you still will have monthly property tax and mortgage insurance payments to make, which have nothing to do with your Reverse Mortgage loan.

How much money can I get?

The amount you can borrow depends on your age, the current interest rate and the appraised value of your home. Generally, the more valuable your home, the older you are, and the lower the interest rate, the more you can borrow.

How you can get the best possible mortgage?

Before you apply for a mortgage, consult with an Atlantic Bay Mortgage Banker. After taking your unique situation into account, their job is to present all the mortgage options available to you, whether you’re a first-time homebuyer or wanting to refinance your existing mortgage. “Your Mortgage Banker is never looking to fit you into a mortgage product,” says Bob Dineen, Atlantic Bay Vice President. “Rather, they find out what your needs are, and looks for the product that is the best fit for your current situation.”

Advantages of having your own personal Mortgage Banker

In today’s environment especially, mortgage rates, products and regulations are changing constantly. Keeping up with it all on your own would be a daunting task. You’ll find it very comforting to have your own personal industry expert, backed by the many industry professionals in Atlantic Bay’s Operations Department, to help you. This is one reason why the tagline under our logo says Atlantic Bay “Lends Peace of Mind.”

Some other advantages to having your own personal Mortgage Banker:

• They can size up your financial situation and make recommendations that can save you money every month.
• They have a network of industry referral partners, such as builders, remodelers, REALTORS and financial planners, should you need one.
• They will come to your home to take your mortgage application, or meet you after hours at the office, if that’s more convenient for you.
• They will attend your closing with you, to make sure the loan process concludes smoothly, with no surprises.

The Mortgage Loan Process

Whether you’re purchasing a home or refinancing your current one, here are the steps involved:

Step 1: Loan Application
As described above, the key to the loan application process going smoothly is us getting together initially for a consultation. At that time, we will obtain all pertinent documents so unnecessary problems and delays can be avoided.
Step 2: Loan Submission
Once we have discussed loan options and picked the best product to fit your needs and goals, we will submit your file to our underwriters for approval.
Step 3: Loan Approval
Loan approval generally takes anywhere from 24 to 72 hours. All parties are notified of the approval and any remaining loan conditions that must be cleared before the loan can close.
Step 4: Documents Drawn
Approximately 1-3 days prior to your closing date, the loan documents (including the note and deed of trust) are completed and sent to the attorney or title company. The escrow officer will make an appointment for you to come in and sign the final documents. (Home purchasers: you will be told at this time how much money you will need to close the loan. Payment must be made in the form of a cashier’s check at closing.)
Step 5: Closing
This is where all loan documents are signed by all necessary parties, and all necessary payments are made. One to two days before closing, your Mortgage Banker and/or Realtor will contact you to review everything related to your home purchase or refi, to ensure a smooth and satisfying transaction takes place at the closing table.
Step 6: Funding
Once all parties have signed the loan documents, they are returned to Atlantic Bay who reviews the package. If all forms have been properly executed, a check is issued to fund the loan.
Step 7: Recording the Loan
Upon receipt of the loan funds, the attorney or title company will record the legal documents necessary for the new loan. (Home purchasers: at this time the property will be transferred into your name. At the same time, the deed of trust is recorded to show the new loan on the property.) Escrow is now officially closed.
Congratulations! You’ve either purchased your new home, or you’ve refinanced your current one.

Analyzing your credit

If your less-than-perfect credit score is holding you back from applying for a mortgage, don’t let that keep you from contacting an Atlantic Bay Mortgage Banker. We can help you analyze a computerized report, available through the mortgage software used at Atlantic Bay, that will identify the areas of your credit history that need improvement. We can then suggest a plan of action to get you back on track as soon as possible, without enlisting the help of a credit repair service. It also helps to know what it is that mortgage company underwriters look for once you’ve submitted a mortgage application.

The Three Cs: Collateral, Capacity, and Credit

Underwriting is the process of providing an approval or denial of funding to potential home buyers, based on factors such as credit, employment, assets, etc., and matches approved risks with appropriate rates, terms and loan amounts.

When your loan is submitted Atlantic May Mortgage Group for underwriting, it goes directly into the hands of one of our local underwriters whose job is to determine your “credit-worthiness” or your ability to repay the loan. Here are a few of the items that are considered when underwriting your loan.

The Property

The property is the lender’s “collateral” for the loan. The value, marketability and

condition of the property are extremely important. The underwriter looks at the

appraisal for this information.

Your Income

The underwriter looks carefully at your ability to repay the loan. Your job stability

and gross income (in relation to your expenses) is critical in this regard. Most income must be verified as having been received for the most recent two years to be used for qualifying purposes.

Your Employment History

A stable history of employment in the same line of work is considered ideal. “Job-hopping” is not looked upon favorably because it may lead to unstable income.

However, if you have switched jobs within the same line of work for advancement in that field, there should be no problem.

Your Assets

The money you have available for a down payment, closing costs, cash reserves (money left over after closing), and other liquid assets is your net worth. You must demonstrate your ability to save money and manage your financial affairs. We must verify the “source of funds” or where the money for the down payment and closing costs came from. Once you’ve applied, never move money around (pay off bills, get a gift, etc.) without first consulting with your mortgage consultant.

Your Credit History

Your credit score is a factor that will be considered by the lender when they look at your loan application. They want to know what your credit history is, and whether you have the ability to pay back the loan you are asking for. In short, good credit translates into lower rates for the home buyer and represents less risk to the lender. Credit scores can range between a low score of 350 and a high of 850. The higher the client’s score is, the less likely they are to default on their loan.

Your Debts

The amount of debt you have affects your ability to repay the loan. Excessive use of credit will not be looked upon favorably. These factors affect the final loan decision.