Financing Tips

Over 95% of real estate transactions involves some types of financing. Depending on the circumstances and your individual needs,selecting the "Right" financing could mean thousands of dollars in savings in fees and interest expenses over the life of the loan.

The best way to begin the process to determine which financing is best for you is to know your financial situation by answering the following questions:

Your credit score:
amount of cash towards the price: (5%, 20%, or 0%)	$
Monthly Gross Income:	Husband $
Monthly Gross Income:	Wife $
How long employed:	Husband	Wife
on current job?	Yrs	Yrs
in this line of work?	Yrs	Yrs

Monthly Obligations:	Amount/Month	Balance
car payment	$	$
Credit Card 1	$	$
Credit Card 2	$	$
Credit Card 3	$	$
Student Loan	$	$
Alimony/Child Support	$	$
Other loans:	$	$

Once you have the above numbers, you are ready to sit down with a lender and complete a loan application. During this process, you will be pre-qualifed or pre-approved based on the underwriting guidelines of each financing program offered. Please ask lots of questions such as: what is the initial interest rate, whether it is an ARM, or fixed rate loan, what is the index and margin, annual and life time caps if it is an ARM, any prepayment penalty? how much it costs in terms of loan points and lender fees? etc. If you have any doubt, call Wing.

Interview at least 2 reputable lenders, mortgage bankers or direct lenders to ensure that you've all the details of each loan program before paying any up front fees such as appraisal and credit report fees.

There are many types of financing and loan programs in the market place, you should follow this rule in determining which lender to go with:

Rule Number One: Explore all loan programs that you are qualified for

ARM Vs. Fixed Rate,
15-Yr Fixed Rate Vs. 30 Yr Fixed Rate Loan
3-Yr Fixed Rate Vs. 5-Yr Fixed Rate
A paper loan Vs. Sub Prime Loans
(find out the reasons you could not qualified under A paper loan)
Buy Down Programs
VA / FHA loans
0% financing: Rate and terms
5% financing: Rate and terms
20% financing: Rate and terms

Then only you pick from the list of loan programs that you are "pre-qualifed" or "pre-approved" from a particular lender. Watch out for the lender who promises everything. Know yourself and your ratios, credit scores, and financial position. Do not fall into a trap by going with a lender who promises the most and could not deliver later when you ran out of time according to the purchase agreement.

One last thing to keep in mind, please do not finance or add on more debts by buying big ticket items such as auto, applicances or furniture during or before purchase your new home.

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