At McLean Mortgage Corporation we always strive to make the process easier for our clients. It's normal to have a lot of questions when thinking about purchasing your first home, or during the process of purchasing or refinancing; so we've put together a list of commonly asked questions for you to reference through out the process. If at any time you have any other questions please contact us.
The best time to apply is before you purchase a home. Getting a “LoanFirst” preapproval will give you more negotiating power with the seller as well as make the process smoother because you will know within what price range to be shopping.
After you have submitted your application, loan approval typically takes just a few days if the documentation we ask to be provided is complete. That is why we provide a Loan Application Documentation Checklist. The more complete the information, the more quickly we can act.
A full list of the documents needed can be found here.
Assuming you have a sales contract signed for a new home, the next step is to make sure all conditions are clear. Many of these conditions are standard and are provided by third parties, such as obtaining an appraisal and clear title. The quicker these conditions are received, the smoother the settlement process.
A prequalification is an opinion on whether you are qualified for the mortgage and does not mean that the information provided has been verified by us or the file has been underwritten by a qualified underwriter. A preapproval means that the relevant information has been verified and the file has been underwritten and approved. The file typically would be approved subject to a ratified sales contract, satisfactory appraisal on the property selected and locking in a rate and loan program.
Typically you can lock in the rate after the application is complete and after a sales contract is ratified. Rates change daily and sometimes more than one time per day and we can keep you informed as to how the markets are changing. With a small deposit which is credited towards closing costs at settlement, we can offer you our exclusive RateFlexSM Program, which will enable us to lock in your rate and if rates fall, offer a lower rate.
You will need money to cover the down payment and closing costs and escrows. The closing costs are itemized on the Loan Estimate, a government required form we will provide. From this number, you can subtract your deposit that is being held by the Realtors and any closing cost credit paid for by the seller.
Each program is different with regard to how you can procure the funds necessary as well as the cash reserves needed after closing. We advise you not to borrow any money until you close on your home, at least not without talking to us first. A car or furniture purchase could change your qualification status. It is advisable to talk to us if there are ANY financial status changes during the processing of your loan or after approval.
We refer to the payment as the “PITI.” This stands for Principal, Interest, Taxes and Insurance. Principal and interest refers to the payment on the loan and taxes and insurance represents payment for bills that will be due each year. We refer to these as escrows, or money you put aside (or escrow) for bills to pay due. Insurance is typically for a “homeowners policy” to protect your house but there may also be monthly mortgage insurance charged by FHA or conventional lenders. Be sure to ask us about our Mortgage Insurance Payment Eliminator ProgramSM.
• Also many homes have homeowner association fees which cover charges for common areas such as pools and tennis courts. If you purchase a condominium, the PITI may include reduced insurance costs because your condo fee will include insurance for the building. These fees are in addition to the PITI and paid directly to the association.
Yes, you will be provided with a copy. If there is a “problem” with the appraisal, for example, if the value is less than the sales prices, you will be notified promptly.
Yes, we will be able to provide you with a copy of your credit report. The Fair Credit Reporting Act requires that this information cannot be shared with other parties to the transaction and therefore it must be provided to you directly.
Today, credit scores are essential determinants with regard to obtaining financing for a home. A lower score can raise your costs for a home mortgage. More than that, a low credit score can affect your costs for insurance, rent, automobile financing and even whether you can obtain employment in some situations. Therefore, it is imperative that you know your credit score and what can be done to raise the score in the short and long run.
At McLean Mortgage we will not only perform a free credit analysis for you, we have access to technological tools and credit experts that will result in a plan to raise your score. Sometimes small changes in your financial picture can yield quick results that can lower your financial costs significantly. Other times, you will have to make changes over the long haul to achieve the best results. Either way, we will be with you every step of the way so that you can achieve your long-term financial goals, including home ownership.
Getting the best rate on a refinancing is the goal of every new homeowner. Unfortunately, rates move up and down every moment. Like the stock market, it is impossible to time the markets just right. If you lock in your rate too early, rates could go down before you close. If you wait, rates could go up and you could miss the boat.
This is exactly why McLean Mortgage introduced the RateFlexSM Program. With RateFlexSM you don’t have to worry as much about timing because you can lock your rate when you purchase your home and if rates go lower before settlement, we will relock your loan at no extra cost. At McLean Mortgage you get competitive rates and the best of both worlds!
Want to lock in a RateFlexSM protected rate today? Get Started Here.
The RateFlex℠ program requires a small deposit at application which is applied to your closing costs at settlement. You can relock the rate at no cost and with no further deposit one time only. The rate lock may occur at any time after your loan is approved, but no later than 7 days before the closing date. Not available for all programs. This is not a commitment to lend. Certain restrictions may apply. Contact us for more information.
The type of loan program you use for your home purchase will depend upon a variety of factors. These factors include your income, assets, credit and other qualification considerations. They also include a look into the future to assess how long you might be living in the home and when you plan to retire. That is why it is important that you select a lender who can give you both the best advice plus the greatest variety of options. As a lender who is a national leader specializing in residential mortgages, you have come to the right place – McLean Mortgage Corporation. We can help you choose:
- The type of mortgage program you should consider. At McLean Mortgage you can choose between several government and conventional mortgage alternatives. We offer no money down mortgages guaranteed by the Department of Veterans Affairs (VA) for active military and veterans. For others who would like a minimum down payment, we offer loans from the Federal Housing Administration (FHA), conforming conventional agencies (Fannie Mae and Freddie Mac) and carry wide range of options for jumbo financing. We even offer Rural Housing Development loans, as well as several government sponsored programs for low-to-moderate income first time homebuyers.
- What type of mortgage instruments should you consider? There are a multitude of mortgage options available – including a variety of fixed rate programs and adjustable rate mortgages. Looking at the future, including expected income growth and retirement plans, we will provide the best expert mortgage advice available within the industry. For example, if you are closer to retirement, the accelerated equity build-up of a 15 year mortgage may be the right option for you. If you are looking to move and sell the home within five years, our True-Five adjustable could be the best alternative.
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There is a reason that the average home owner has a net worth which is over ten times that of renters, according to statistics published by the Federal Reserve. As a long-term investment, a home carries major advantages over just about any other investment vehicle:
- Leverage. The fact that you can purchase a home with a small down payment means that you own a large asset which has historically gone up in value over time. This “leverage” magnifies the gain as opposed to receiving the same rate of return from a bank account or stocks.
- Tax Deduction. Unlike rent, a significant portion of a mortgage payment (real estate taxes and interest) can be deducted from your taxes which lowers the monthly cost of home ownership.
- Automatic Savings. One hundred percent of your rent goes to your landlord. Part of your mortgage payment goes towards paying down the principal of your mortgage, which means you are paying yourself instead of your landlord.
- Inflation Protection. Your entire rent payment goes up every time your landlord announces an increase. A fixed rate mortgage payment does not rise as quickly because only a small portion of the payment can rise. Therefore, owning is a great financial decision today and it only gets better with time!
Did you know that Fannie Mae surveys have shown that Americans would prefer to own even if the financial decision to own was a “break even” when compared to renting? Here are a few reasons why owing results in a better quality of life:
- Security. No longer can a landlord tell your family to move from your home.
- Freedom of Choice. You can decide what colors to paint your walls and what plants look best in your yard.
- Community. Owning makes you a long-term part of a community in which you will develop relationships that will last a lifetime.
- Better Neighborhoods. Communities of home owners have lower crime rates and children of owners do better in school as opposed to renters, even when income and educational levels are the same for both renting and owning parents*
*Source: “Measuring the Benefits of Homeowning: Effects on Children Redux,” published by the Lusk Center for Real Estate.
Only McLean Mortgage Corporation offers a LoanFirstSM Preapproval Program, which is the most important first step in purchasing a home whether you are a first time buyer or a seasoned investor. Having our underwriters offering a commitment before you shop will put you ahead of the competition when shopping for a home.
- A LoanFirstSM commitment gives you more negotiating power with the seller because they know your documentation has been approved.
- You will be able to shop with the peace of mind that comes with knowing that an underwriter has reviewed your file.
- The entire process is smoother with a LoanFirstSM because any issues that may come up during the process can be resolved up-front, without the pressure of a fast-approaching settlement date.
Click Here to get started on a free, no obligation LoanFirstSM Preapproval.
There are several reasons as to why you might consider a newly constructed home as opposed to purchasing a resale.
- In times of tight inventory, there may be a better selection of new homes available.
- A new home gives you the ability to select the lot and features, instead of trying to find the right “fit” in a home which is already built.
- Because everything is new, there is less maintenance costs.
- Newer homes have more advanced energy savings and technology features.
- You can start out in a community with people who are new residents like you, which is a great position to start long-lasting relationships.
If you are a builder who would like us to be a preferred lender, Click Here to contact us.
A homeowner might refinance their mortgage to achieve one or more of these objectives:
- Lower your monthly payment. When market rates are lower than the present rate on your mortgage, a refinance may translate into hundreds of dollars in monthly savings. Keep in mind that a homeowner may have paid a higher rate on their original mortgage not only because market rates were higher at the time, but also due to other situations such as a lower credit score which is now higher or a higher home value.
- Build up equity. More and more homeowners have come to understand the value of paying off their mortgage early. This is a very important tactic for those who want to use their home as a significant component of their retirement and/or wealth building strategies. McLean can present options that will retire a mortgage in 20, 15 or even 10 years and these options are typically offered at lower rates than 30 year mortgages.
- End costly mortgage insurance payments. Many times a homeowner must pay mortgage insurance when they purchase a home because they can’t afford a down payment of 20% of the purchase price. Many times a combination of home appreciation with paying down your mortgage over time will put you in position to eliminate your monthly mortgage insurance payment in addition to achieving other objectives through refinancing.
- Safety from Adjustables. Many new homeowners opt for adjustable rate mortgages (ARMs) when they purchase their homes to achieve a lower payment. Yet there is a long-term risk of rising payments after rates adjust in three to five years. Refinancing at the end of this period allows you to experience the benefit of the adjustable and then return to the safety of a fixed rate – the best of both worlds.
- Consolidate debts. Many homeowners encounter financial obligations which can cause more pressure on a monthly budget. With sufficient equity in your home it may be possible to consolidate these debts and lower your total payments by hundreds, if not thousands, of dollars per month. Sometimes portions of these savings may be applied to shorten the term of the new mortgage, not only helping you in the short-run, but helping you achieve your long-term financial objectives as well.
- Obtain cash. The equity in your home can also be used for additional purposes besides consolidating debts. You might use the equity to fund a retirement plan, purchase investment property or pay for a wedding or college. Whatever your need, we will help you make the best decision to achieve your goals.