1. How
will I know how much I can borrow?
Before you look for a home, Veritas Funding can work with you to get you
qualified. The information you provide
about income, debts and assets allows
Veritas Funding
to determine the approximate amount
you can borrow. When Veritas Funding pulls your credit report,
your application can be submitted
to the underwriter for a full credit
approval. A written credit approval
can be provided to you and used as
a bargaining tool.
TOP
2.
What are ratios?
Ratios are used as a guide to assist
the loan underwriter in determining
whether or not you can repay the new
loan. The housing ratio is calculated
by taking the total (principal &
interest, taxes, home owners insurance
and Private Mortgage Insurance (PMI))
estimated payment for the new loan
and dividing it by your gross monthly
income (before taxes). The debt ratio
is the proposed housing payment plus
all your monthly debts (i.e. credit
cards, auto loans, student loans,
etc.) divided by your gross monthly
income.
TOP
3. How
much money do I need for a down payment
and closing costs?
There are many different loan programs
available to you. Some require no
down payment, others as little as
3% to 5% of the loan's value. Closing
costs average about 3% per loan. Some
programs allow the down payment and/or
closing costs to be gifted by a family
member or non-profit organization.
Veritas Funding
is equipped with the knowledge to
determine what loan program best suits
your needs.
TOP
4. What
do I need to bring to closing?
Your loan closing will take place
at a local title company.
You will need to bring a cashier’s
check for the amount of your settlement
(Veritas Funding will let you know this
amount before hand.) along with your
gray notebook provided at loan application.
TOP
5.
What does “loan to value”
(LTV) mean?
Loan to value (LTV) is the loan amount
divided by the lesser of the sales
price or the appraised value. For
example, if you are paying 20% of
the total cost of the home for down
payment, you would only be borrowing
80% of the total sales price from
the lender. Therefore, your LTV would
be 80%.
TOP
6. What
is Private Mortgage insurance (PMI)?
Mortgage insurance covers the lender
in the event of a foreclosure. The
borrower pays for the mortgage insurance
in their monthly payment. Any loan
with a first mortgage loan to value
above 80% requires mortgage insurance.
TOP
7. What
is an 80/10/10 and an 80/15/5?
An 80/10/10 is a 80% first mortgage,
a 10% second mortgage and 10% down
payment. This structure allows 90%
financing without mortgage insurance.
When a borrower chooses to put down
less than 20%, he or she may split
the loan into two loans (80/10/10)
or have one loan at 90% LTV with mortgage
insurance. The 80/15/5 works in the
same way with less down.
TOP
8. What
if I don’t have any established
credit?
If you don’t have enough established
credit, Veritas Funding can work with
you to establish alternative credit
ratings. If you are renting or paying
utilities, these can be used as credit
ratings. Not all loan programs allow
for alternative credit. However, Veritas Funding can advise you on available
creative financing options.
TOP
9. What
if I’ve filed bankruptcy or
have credit problems?
Your credit payment history serves
as an indication of your intent to
repay a mortgage loan. While good
credit history is important, perfect
credit history is not required. Credit
counseling agencies specialize in
meeting with clients and reviewing
your credit history. If you have outstanding
obligations, the credit agencies can
work with you and your creditors to
help you make payment arrangements.
For more specific details regarding
bankruptcies and credit issues, please
contact Veritas Funding.
TOP
10.
How do I “lock in” my
interest rate?
Veritas Funding
can “lock-in” your interest
rate either at application or over
the telephone. You must have identified
a property in order to lock in the
rate. Lock terms range from 15 to
60 days at no charge. Extended interest
rate locks for over 60 days are available
with an up-front fee.
TOP
