Frequently Asked Massachusetts Mortgage Questions
- Questions From First Time
Mortgage and Loan Financial Questions
Title & Homeowner's Insurance Questions
(What do all these terms mean?)
Questions From First Time Home Buyers
- Should I buy a home instead
- Can I buy a home even if I
have bad credit, and don't have much for a
- How can I find out about my
credit score and history?
- Are there special home owner
ship programs for single parents?
- How are PRE-QUALIFYING and
- Should I use a Massachusetts real
- How much money will I have
to come up with to buy a home?
- How do I know if I can get
- Is it possible to get a gift
from a relative for 100% of the down payment?
- Can I borrow the funds for
the down payment?
- How do I find a Massachusetts
- How do I know which type
of loan is best for me?
- What will my Massachusetts mortgage
- In addition to the mortgage
payment, what other costs do I need to consider?
- What do I need when I apply
for a mortgage in Massachusetts?
- What happens after I've applied
for my loan?
- What is a good faith estimate,
and how does it help me?
- What is RESPA and how does
it protect me?
- Does the lender have any
other responsibilities besides RESPA?
- When I find the home I want,
how much should I offer?
- What if my offer is rejected?
- What should I watch for during
the final walk through?
- What will happen at closing?
- Will the lender require an
appraisal of the property? If so, will I receive
a copy of it?
- What responsibilities do
I have at closing?
- Should I buy a home instead of renting?
A home is an investment. When you rent, you
write your monthly check and that money is
gone forever. But when you own your home,
you can deduct the cost of your Massachusetts mortgage
loan interest from your federal income taxes,
and usually from your state taxes. This will
save you a lot each year, because the interest
you pay will make up most of your monthly
payment for most of your mortgage. You can
also deduct the property taxes you pay as
a homeowner. In addition, the value of your
home may go up over the years. Finally, you'll
enjoy having something that's yours.
- Can I buy a home even if I have bad credit,
and don't have much for a down-payment?
You may be a good candidate for one of the
federal mortgage programs. Start by contacting
the Loan Specialist assigned to you in
this site, they will help you sort through
all your options.
- How can I find out about my credit score
and history? Click
- Are there special home owner ship programs
for single parents? Yes, there is help
available. Start by becoming familiar with
the homebuying process and pick a good real
estate broker. Although as a single parent,
you won't have the benefit of two incomes
on which to qualify for a loan, consider getting
pre-qualified, our loan specialist will be
glad to help, so that when you find a house
you like in your price range you won't have
the delay of trying to get qualified.
- How are PRE-QUALIFYING and PRE-APPROVAL
different? Pre-qualification is
an informal way to see how much you maybe
able to borrow. You can be 'pre-qualified'
over the phone or here online, with no
paperwork by telling your loan specialist
your income, your long-term debts, and the
size of the down payment you can afford. Without
any obligation, this helps you arrive at a
ballpark figure of the amount you may have
available to spend on a house. Pre-approval
is a lender's actual commitment to lend to
you. It involves assembling the financial
records mentioned in Question 11 below.
- Should I use a Massachusetts real estate
broker? Using a real estate broker is
a good idea. All the details involved in home
buying, can be mind-boggling. A good real
estate professional can guide you through
the entire process and make the experience
much easier. A real estate broker will be
well-acquainted with all the important things
you'll want to know about a neighborhood you
may be considering... the quality of schools,
the number of children in the area, the safety
of the neighborhood, traffic volume, and more.
He or she will help you figure the price range
you can afford and search the classified ads
and multiple listing services for Massachusetts
homes you'll want to see. With immediate access
to homes as soon as they're put on the market,
the broker can save you hours of wasted driving-around
time. When it's time to make an offer on a
home, the broker can point out ways to structure
your deal to save you money. He or she will
guide you through the paperwork, and be there
to hold your hand and answer last-minute questions
when you sign the final papers at closing.
And you don't have to pay the broker anything!
The payment comes from the home seller - not
from the buyer.
- How much money will I have to come up
with to buy a home? That depends on a
number of factors, including the cost of the
house and the type of mortgage you get. In
general, you need to come up with enough money
to cover three costs: earnest money
- the deposit you make on the home when you
submit your offer, to prove to the seller
that you are serious about wanting to buy
the house; the down payment,
a percentage of the cost of the home that
you must pay when you go to settlement; and
closing costs, the costs associated
with processing the paperwork to buy a house.
When you make an offer on a home, your
real estate broker will put your earnest
money into an escrow account. If the offer
is accepted, your earnest money will be
applied to the down payment or closing costs.
If your offer is not accepted, your money
will be returned to you. The amount of your
earnest money varies. If you buy a HUD home,
for example, your deposit generally will
range from $500 - $2,000.
The more money you can put into your down
payment, the lower your mortgage payments
will be. Some types of loans require 10-20%
of the purchase price. FHA loans require
only 3% down - and sometimes less.
Closing costs - which you will pay at
settlement - average 3-4% of the price of
your home. These costs cover various fees
your lender charges and other processing
expenses. When you apply for your loan,
your lender will give you an estimate of
the closing costs, so you won't be caught
- How do I know if I can get a loan?
Use our simple mortgage
calculators to see how much mortgage you
can afford. If the amount you can afford is
significantly less than the cost of homes
that interest you, then you might want to
wait awhile longer. But before you give up,
contact our loan specialist, they can help
you evaluate your loan potential. Your loan
specialist or broker will know what kinds
of mortgages the lenders are offering and
can help you choose a lender with a program
that might be right for you. It is also a
good idea is to get pre-qualified for a loan.
Then you'll know exactly how much you can
afford to spend, and it will speed the process
once you do find the home of your dreams.
- Is it possible to get a gift from a
relative for 100% of the down payment?
Yes. A relative may provide 100% of the down
payment as a gift, but the lender will likely
ask that a letter be signed by the donor relative
stating that the gift funds are not expected
to be repaid. Also many loan products require
a 20% down payment if the source of the down
payment is exclusively from gift funds. Although
it is worth noting that many portfolio lenders
(i.e. banks & savings banks) may have
smaller down payment requirements when the
source is a gift from a relative.
- Can I borrow the funds for the down payment?
Yes. It is possible to borrow against an asset
that you currently own for the down payment.
For example you can borrow against your 401(K),
assuming that your company plan permits it,
and you could also borrow against your current
residence to purchase a new one (i.e. a bridge
loan or an equity line). You may also borrow
against your fully invested stock portfolio,
avoiding the tax consequences of selling prematurely.
- How do I find a Massachusetts lender?
Right here. You have a personal loan specialist
right here on this site who's job is to help
you get the best mortgage rates available.
He or she will work with banks, a savings
and loan companies, a credit unions, mortgage
companies, and various Massachusetts government
lenders. When your loan specialist shops
for a loan... you save money! Lenders
can offer quite different interest rates and
loan fees; and as you know, a lower interest
rate can make a big difference in how much
home you can afford. Talk with your loan specialist
- How do I know which type of loan is best
for me? Your loan specialist on this site
can tell you exactly which type of mortgage
fits your situation the best. Here are a few
of the most common types of loans. Most people
use a fixed-rate mortgage. In a fixed rate
mortgage, your interest rate stays the same
for the term of the mortgage, which normally
is 30 years. The advantage of a fixed-rate
mortgage is that you always know exactly how
much your mortgage payment will be, and you
can plan for it. Another kind of mortgage
is an Adjustable Rate Mortgage (ARM). With
this kind of mortgage, your interest rate
and monthly payments usually start lower than
a fixed rate mortgage. But your rate and payment
can change either up or down, as often as
once or twice a year. The adjustment is tied
to a financial index, such as the US Treasury
Securities index. The advantage of an ARM
is that you may be able to afford a more expensive
home because your initial interest rate will
be lower. There are several government mortgage
programs,including the Veteran's Administration's
programs and the Department of Agriculture's
programs. Most people have heard of FHA mortgages.
FHA doesn't actually make loans. Instead,
it insures loans so that if buyers default
for some reason, the lenders will get their
money. This encourages lenders to give mortgages
to people who might not otherwise qualify
for a loan. Talk to the loan specialist assigned
to you here on our site about the various
kinds of loans, before you begin shopping
for a home.
- What will my Massachusetts mortgage cover?
Most loans have 4 parts: principal: the repayment
of the amount you actually borrowed; interest:
payment to the lender for the money you've
borrowed; homeowners insurance: a monthly
amount to insure the property against loss
from fire, smoke, theft, and other hazards
required by most lenders; and property taxes:
the annual city/county taxes assessed on your
property, divided by the number of mortgage
payments you make in a year. Most loans are
for 30 years, although 15 year loans are available,
too. During the life of the loan, you'll pay
far more in interest than you will in principal.
Because of the way loans are structured, in
the first years you'll be paying mostly interest
in your monthly payments. In the final years,
you'll be paying mostly principal.
- In addition to the mortgage payment,
what other costs do I need to consider?
You'll have monthly utilities. Your real estate
broker will be able to help you get information
from the seller on how much utilities normally
cost. In addition, you might have homeowner
association or condo association dues if you
are buying a condo or townhouse. You'll have
property taxes, and you also may have city
or county taxes. Taxes are often rolled into
your mortgage payment.
- What do I need when I apply for a mortgage
in Massachusetts? You will need to fill out
a loan application. You'll need the following:
1) social security numbers for both your and
your spouse, if both of you are applying for
the loan; 2) copies of your checking and savings
account statements for the past 6 months;
3) evidence of any other assets like bonds
or stocks; 4) a recent paycheck stub detailing
your earnings; 5) a list of all credit card
accounts and the approximate monthly amounts
owed on each; 6) a list of account numbers
and balances due on outstanding loans, such
as car loans; 7) copies of your last 2 years'
income tax statements; and 8) the name and
address of someone who can verify your employment.
Depending on the lender, you may be asked
for other information. It usually takes a
lender between 1-6 weeks to complete the evaluation
of your application.
- What happens after I've applied for
my loan? Its not unusual for the lender
to ask for more information once the application
has been submitted. The sooner you can provide
the information, the faster your application
will be processed. Once all the information
has been verified the lender will call you
to let you know the outcome of your application.
If the loan is approved, a closing date is
set up and the lender will review the closing
with you. And after closing, you'll be able
to move into your new home.
- What is a good faith estimate, and how
does it help me? It's an estimate that
lists all fees paid before closing, all closing
costs, and any escrow costs you will encounter
when purchasing a home. The lender must supply
it within three days of your application so
that you can make accurate judgments when
shopping for a loan.
- What is RESPA and how does it protect
me? RESPA stands for Real Estate Settlement
Procedures Act. It requires lenders to disclose
information to potential customers throughout
the mortgage process, By doing so, it protects
you the borrower from abuses by lending institutions.
RESPA mandates that lenders fully inform borrowers
about all closing costs, lender servicing
and escrow account practices, and business
relationships between closing service providers
and other parties to the transaction.
- Does the lender have any other responsibilities
besides RESPA? Lenders are not allowed
to discriminate in any way against potential
borrowers. If you believe a lender is refusing
to provide his or her services to you on the
basis of race, color, nationality, religion,
sex, familial status, or disability, contact
HUD's Office of Fair Housing at 1-800-669-9777
(or 1-800-927-9275 for the hearing impaired).
- When I find the home I want, how much
should I offer? A real estate broker can
help you here. But there are several things
you should consider: 1) is the asking price
in line with prices of similar homes in the
area? 2) Is the home in good condition or
will you have to spend a substantial amount
of money fixing it up? You should get a professional
home inspection before you make your offer.
Your real estate broker can help you arrange
one. 3) How long has the home been on the
market? If it's been for sale for awhile,
the seller may be more eager to accept a lower
offer. 4) How much mortgage will be required?
Make sure you really can afford whatever offer
you make. 5) How much do you really want the
home? The closer you are to the asking price,
the more likely your offer will be accepted.
In some cases, you may even want to offer
more than the asking price, if you know you
are competing with others for the house.
- What if my offer is rejected? Your
broker can help you with negotiating. You
may have to offer more money, but you may
ask the seller to cover some or all of your
closing costs or to make repairs that wouldn't
normally be expected. Often, negotiations
on a price go back and forth several times
before a deal is made. Don't get so caught
up in negotiations that you lose sight of
what you really want and can afford!
- What should I watch for during the final
walk through? This will likely be the
first opportunity to examine the house without
furniture, giving you a clear view of everything.
Check the walls and ceilings carefully, as
well as any work the seller agreed to do in
response to the inspection. Any problems discover
should be brought up prior to closing. It
is the seller's responsibility to fix them.
- What will happen at closing? Basically,
you'll sit at a table with your loan specialist,
the broker for the seller, probably the seller,
and a closing agent. The closing agent will
have a stack of papers for you and the seller
to sign. While he or she will give you a basic
explanation of each paper, you may want to
take the time to read each one and/or consult
with your agent to make sure you know exactly
what you're signing. After all, this is a
large amount of money you're committing to
pay for a lot of years! Before you go to closing,
your lender is required to give you a booklet
explaining the closing costs, a "good faith
estimate" of how much cash you'll have to
supply at closing, and a list of documents
you'll need at closing. If you don't get those
items, be sure to call your lender BEFORE
you go to closing. Be sure to read our booklet
on settlement costs. It will help you understand
your rights in the process. Don't hesitate
to ask questions.
- Will the lender require an appraisal
of the property? If so, will I receive a copy
of it? Yes. The property is the collateral
for the loan, therefore an appraisal is almost
always required and if a borrower pays for
the appraisal he or she is definitely entitled
to receive a copy of it.
- What responsibilities do I have at closing?
Be sure to read and understand everything
before you sign. Refuse to sign any blank
documents. Do not buy property for someone
else. Do not overstate your income. Do not
overstate how long you have been employed.
Do not overstate your assets. Accurately report
your debts. Do not change your income tax
returns for any reason. Tell the whole truth
about gifts. Do not list fake CO-borrowers
on your loan application. Be truthful about
your credit problems, past and present. Be
honest about your intention to occupy the
house Do not provide false supporting documents.
- More Questions? Please contact your
personal mortgage loan specialist, assigned
to you here on this site, don't hesitate to
ask any questions you may have.
Hours: 10am-6pm Mon.-Fri. MST
Phone: (877) 511-8811
Fax: (866) 897-2452
My name is Elizabeth Stevenson. I am a licensed and bonded loan officer with Accurate Lending. I have been chosen to be your personal representative for any loan needs or questions that you might have.
Look for my picture throughout the site for helpfult tips and information and feel free to contact me anytime.
I look forward to working with you.