Lesson 3: Getting a
A mortgage is a loan for which
your home serves as the collateral. A basic monthly mortgage payment consists of
the principal amount being borrowed, interest, taxes and insurance.
There are many different types of
mortgages. Which one is right for you? When reviewing your options, you should
consider your current financial picture, how your finances might change in the
future, how long you intend to remain in the home, and how comfortable you are
with fluctuating mortgage payments.
Kinds of Home Mortgages Does M.O.M. Offer?
Rate: Security and Stability
mortgages remain the most popular type. With these loans, the interest rate is
fixed for the life of the mortgage, so your monthly payments never
2.Adjustable Rate Mortgages: Flexibility and Control
Adjustable-rate mortgages (ARMs)
generally start out with an interest rate lower than a fixed-rate loan. This
saves you money early on, and may help you qualify for a more expensive home.
However, your rate is tied to a market index. As the index goes up or down, your
payments will also change at each scheduled adjustment period. There are "rate
caps” to limit the amount your mortgage can go up or down.
M.O.M. offers a variety of home financing options for customers with
special considerations. These may include government programs; FHA, VA or USDA also known as rural housing for qualified borrowers and properties.
You've identified your price range
and have learned about the mortgage options that may be right for you. Now it's
time to gather all the information and supporting documentation you'll need to
apply for a mortgage. Getting ready ahead of time will help the process move
along quickly and smoothly.
Here are some of the documents you may need to prepare for the home
social security number (or proof of permanent residency)
stubs for the last 2 months
forms for the past two years.
statements for the past 3 months.
- 2 years
of Federal tax returns if self employed.
- A signed
contract of sale (if you've already chosen your new home)
- Information on current creditors-car loan, student loan, credit cards,
Review a copy of your
credit report will be ordered by M.O.M. as part of your application process;
however, if you review your credit report and address any errors before you
apply, you can avoid potential delays during processing. Make sure your credit
report accurately reflects your current credit situation.
Remember, when assessing your
financial picture, be as honest and thorough as possible. That's the best way to
secure the mortgage that's right for you. There are mortgages for just about
every buyer and situation.
You should get a Home Inspection
prior to closing. A pre-purchase home inspection, performed by a professional,
is a visual examination of the readily-accessible areas of a home to provide an
accurate evaluation of the home's condition at the inspection. This evaluation
is presented to the buyer in a comprehensive report so buyers are fully informed
of the home's condition prior to purchase. While a home inspection is not
required by M.O.M. , it is something you should consider.
When should I apply
for a mortgage?
Keep in mind,
even if you do not have a specific property address, you can still apply for
your mortgage. M.O.M. can issue a credit-only pre-approval subject to receipt of
a satisfactory purchase contract and appraisal and a verification of the income,
debt and asset information you provide.
How Can I Apply with
- Answer some
basic questions and we'll have a Mortgage Consultant contact you at your
convenience. You can complete our online mortgage application at your own pace
and when it is convenient for you.
- Make one easy
phone call to M.O.M.. Just dial 320-271-4666, and a M.O.M.
Mortgage Consultant will take your information over the telephone, and work with
you so that you have everything you need to close your
- You can work
face-to-face with a local expert. Come on in to
our local office to visit with
Once you submit your application,
a M.O.M. Mortgage Consultant will provide personal service to move the process
along. He or she will answer your questions about the different types of
mortgages available and current rates. You'll need to provide your Mortgage
Consultant with information on your income, credit history, debts and liquid
assets. If you've already gathered this documentation, things should go
What happens After I
Once you apply
online, your application will typically proceed as
Mortgage Consultant will review your information and contact you directly to
answer your questions. He or she will also request from you any required
documents that may be needed to begin processing the
your Mortgage Consultant will place orders for a property appraisal, a survey of
property boundaries, a flood determination, as well as a title search and title
Underwriter will review all your information and decide whether to approve or
deny the loan. The Underwriter will not have direct contact with
the Closer will assemble the closing package, and ensure that all fees and other
closing payments are accurately documented. In most cases, he or she will
establish an escrow account for payment of necessary insurance and real estate
will be contacted to schedule a date and time for the closing.