Payless Loan Source

Purchase Contract, signed by the buyer AND the seller,EMD (Earnest Money Deposit) deposit copy on the proposed home,Contact information of all Realtors, Builders, Settlement Agents, Escrow/Title Officers, Insurance Agents, Attorneys and Home Owners� Association,If available: Copy of Listing Sheet and legal description (if the property is a condominium please provide condominium declaration, by-laws and most recent budget).

Copy of signed sales contract including all riders,Verification of the deposit you placed on the homeNames, addresses and telephone numbers of all realtors, builders, insurance agents and attorneys involved,Copy of Listing Sheet and legal description if available (if the property is a condominium please provide condominium declaration, by-laws and most recent budget).

Copies of last 2 pay-stubs � 30-day period.Copies of W-2 forms for the past two years.Names and addresses of all employers for the last two years.Letter explaining any gaps in the employment for the past 2 years. Immigration Status � I-94, H-1B, I-140 approval, EAD card, I-485 approval/receipt, Green card.Social Security Number.

Provide full FEDERAL tax returns for the last two years PLUS year-to-date Profit and Loss statement (please provide complete FEDERAL tax return including attached schedules and statements. If you have filed an extension, please supply a copy of the extension.).K-1�s for all partnerships and S-Corporations for the last two years (please double-check your return. Most K-1�s are not attached to the 1040.).Completed and signed Federal Partnership (1065) and/or Corporate Income Tax Returns (1120) including all schedules, statements and addenda for the last two years. (Required only if your ownership position is 25% or greater.).

Provide divorce decree/court order stating amount, as well as, proof of receipt of funds for last year.

Provide award letter from agency or organization.

Sale of your existing home � provide a copy of the signed sales contract on your current residence and statement or listing agreement if unsold (at closing, you must also provide a settlement/Closing Statement).Savings, checking or money market funds � provide copies of bank statements for the last 2 months.Stocks and bonds � provide copies of your statement from your broker or copies of certificates.Gifts � Provide Gift letter/Affidavit and proof of receipt of funds.Based on information appearing on your application and/or your credit report, you may be required to submit additional documentation.

The Real Estate Settlement Procedures Act (RESPA) contains information regarding the settlement or closing costs you are likely to face. Within 3-days from the time of your mortgage application, your lender is required to provide you a �good faith estimate of settlement costs� (GFE) based on their understanding of your purchase contract. This estimate will indicate how much cash you will need at closing to cover prorated taxes, first month�s interest, and other settlement costs.RESPA requires lenders to give you an information booklet about settlement costs, written by the U.S. Department of Housing & Urban Development which address how to negotiate a sales contract, ways to work with professionals like attorneys, real estate agents, lenders, etc, and your given rights as a home buyer. It gives an example of the Uniform Settlement Statement used at your closing. You are entitled to see a copy of the statement 1-business day prior to closing indicating your final costs.

PMI kicks in when homeowners have less than 20% invested in a home. It is no secret that a home owner with higher than 29% equity is less likely to default on his mortgage payments. Naturally, loans with <=20% equity are riskier for lenders and investors. Simply out, Private Mortgage insurance is a policy that covers this risk. PMI enables a borrower become a home owner when they do not have 20% in down payment. At the same time, the policy coverage protects the lender when the borrowers default on their mortgage payments.PMI is a tool helping first time home owners and borrowers so it should be seen as help not hindrance. PMI buys an insurance policy but the beneficiary is the lender not the borrower. PMI payment tends to be higher for a lower down payment coupled with a higher loan amount. Borrowers with a lower credit score are subject to a steeply higher PMI so it can quickly add up. Your loan officer can run a PMI quote for you but the bare truth is this: If you can�t afford PMI, you probably can�t afford the home either.The good news is that you can call the mortgage servicer upon reaching 20% equity and demand that the PMI be scrapped off your monthly payments., Most of the time, this should be a straight forward process but if you run into road blocks, you can refinance your way out of the PMI payments. Ask us about the no cost refinance process that eliminates your PMI. (We specialize in this process).There are several ways you can pay for PMI but the most common method is to pay it monthly, alongf= with your mortgage payments. You can also pay for the policy upfront in one lump sum payment but it can cost several thousand dollars. There is also a novel method called LPMI (Lender Paid PMI), that lets the cost be borne by the lender. We do a ton of these loans so please call us about this loan.

The major portion of other up-front expenses is the deposit or binder you make at the time of the purchase offer, the remaining cash down payment you make at closing, or can include.Inspections � Lenders may require inspections, and you can make your purchase offer contingent based on satisfactory completion of some other inspections such as structural, water quality tests, septic, termite, roof and radon tests. You and the seller can negotiate these inspection fees.Owner�s Title Insurance � You may want to purchase title insurance in case of unforeseen problems so you�re not left owing a mortgage on property you longer own. A thorough title search ensures a clear title.Appraisal Fees � You may want to hire an Appraiser either before you sign a purchase offer, or after reviewing the lender�s appraisal report.Money to the Seller � You�ll need to pay for items in the house you want that were not negotiated in the purchase offer such as appliances, light fixtures, drapes, lawn furniture, or fuel oil and propane left in tanks.Moving Expenses � If you are changing jobs, your new employer may pay for your relocation, otherwise you must figure in the moving costs such as truck rentals, professional movers, cash for utility deposits like telephone, cable, electricity, etc.Escrow Account Funds � In the purchase offer, you can request that the seller set up an Escrow Account to defray any costs for major cleanup, radon mitigation procedures, house painting, appliance repairs, etc. Depending on the purchase offer contract and contingency clauses, you may discover that you have expenses upon moving in.Example: Your purchase offer contract has a clause making the purchase contingent on a satisfactory structural inspection, and it�s determined that the house needs a new roof. You can negotiate to have the seller arrange for the work to be done but, this will delay the closing date. You may have to agree to a higher price for house, or to pay some of the new roof repair expenses. Or you and the seller may split the cost using estimates from a contractor of your choice, and each of you will put funds into an Escrow Account. Or, the seller may be willing to reduce the sale price of the house, but either way cash will be needed for the new roof.Time Investment � One often overlooks major up-front costs in buying a home. The time and expenses invested in house-hunting, which can take up to 4-months, plus the time spent searching for the best mortgage for you, the right real estate agent, an attorney, and other related things that take up your valuable time.

Most people associate closing costs with finance charges levied by mortgage lenders. The charges you pay will vary among lenders, so it�s good to shop around for the best combination of mortgage terms and closing, or settlement costs:Origination Fee � For processing the mortgage application there may be a flat fee, or a percentage of the mortgage loan.Credit Report � Most lenders require a credit report on you and your spouse, or an equity partner. This fee is often a part of the origination fee.Points � One point is equal to 1% of the amount borrowed and can be payable when the loan is approved either before or at closing. Points can be shared with the seller which is negotiable in the purchase offer. Some lenders will let you finance points which will add to the mortgage cost. If you pay the points up front they are tax deductible in the year they are paid. Different deductibility rules apply to second home loans.Lender�s Attorney�s Fees � For your attorney to draw-up documents and to ensure that the title is clear, and for representation at the closing.Document Preparation Fees � There are several documents and papers prepared during the home-buying process ranging from the application to the closing. Lenders may charge for this, or the fees may be included in the application and/or attorney�s fees.Preparation of Amortization Schedule � Some lenders will prepare a detailed amortization for the full term of your mortgage. This is usually done for fixed mortgages or adjustable mortgages.Land Survey � Lenders may require that the property be surveyed to ensure it has not been encroached and to verify the buildings and improvements to the property.Appraisals � Professional Appraisers can do a comparison of the value of the property to that of other recently sold neighborhood properties. Lenders want to be sure the property is worth the value of the mortgage loan.Lender�s Mortgage Insurance � If your down payment is 20% or less, many lenders require that you purchase Private Mortgage Insurance (PMI) for the loan amount. If you should default on your loan, the lender will recover their money. These insurance premiums will continue until your principal payments, plus the down payment equal 20% of the selling price and may continue for the life of the loan. The premiums are usually added to any amount you must escrow for taxes and homeowner�s insurance.Lender�s Title Insurance � Even with a title search for any property obstacles, liens or lawsuits, many lenders require insurance to protect their mortgage investment. This is a 1-time insurance premium usually paid at closing, and is for the lender only, not the homebuyer.Release Fees � If the seller has worked with a contractor who put a lien on the house and is expecting payment from the proceeds of the house sale, there may be fees to release the lien. The seller usually pays these fees which could be negotiated in the purchase offer.Inspections Required by Lenders � The lender may require a Termite Inspection if you apply for an FHA or a VA mortgage loan. In many rural areas a water test may be required to ensure the well and water system will maintain an adequate water supply to the house; for quantity not quality. Depending on the sales contract and property type, additional inspections may be required.Prepaid Interest � The first regular mortgage payment is usually due from 6-8 weeks from closings; however, interest costs begin at closing time. The lender will calculate the interest owed for that period of time, and that fraction of interest is sometimes due at closing.Escrow Account � Lenders often require that you set-up an Escrow Account, where you will make monthly payments to, for taxes, homeowner�s insurance, and sometimes PMI (Private Mortgage Insurance). The amount placed in this account at closing depends on when property taxes are due and the timing of the settlement transaction. The lender can give you a cost approximation during the application process of your mortgage loan.