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Who can benefit the most from a pre-approval?
Pre-approval is a great advantage for anyone buying a home, but it can be especially useful for:
• First-time homebuyers, whom sellers may see as less likely to obtain financing than buyers who've already demonstrated the ability to make monthly mortgage payments. A pre-approval helps level the playing field by showing that a lender has already run the numbers and is willing to proceed with the transaction.
• Self-employed buyers or commissioned employees, who may lack the financial documentation of salaried employees. Showing that a lender has already considered these factors will help put sellers at ease.
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How much can I borrow?
There are several factors that help determine how much you can borrow. Your down payment amount, credit history, personal balance sheet, income, and employment history each play a role in calculating the loan amount that you may secure.
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How much should I put down?
Oftentimes, the larger your down payment, the less interest you will accrue over time. Conversely, if you plan to sell your home, pay off the loan, or refinance in the near future, then a large down payment may not be beneficial. Consult with one of our BHS Home Loan counselors to determine which option is best for you.
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Can I have my mortgage payment deducted automatically from my checking or savings account each month?
Typically, after closing your mortgage loan, you will have the option of enrolling in an automatic mortgage payment program. You may be asked to provide an authorization form with a voided check or savings account slip attached to set up the draft. The payment is typically debited on a preset day each month.
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How are rates determined?
Rates are determined by the stock market and other financial indicators. These rates can change daily or even more than once within the same day. The changes are based on many different economic indicators in the financial markets. To obtain current interest rates, contact your mortgage lender.
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How can I determine what mortgage amount I will qualify for?
Based on your income, your current debts and estimated down-payment, your lender can usually help you determine the maximum mortgage amount for which you could qualify within minutes. Many lenders have a toll-free 800 number where you may speak with a mortgage professional or you may also reference the lender's mortgage calculator located on its mortgage Internet site. This process is frequently referred to as a 'prequalification analysis'.
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How long does it take to obtain loan approval?
Depending on your credit history and down payment and the loan program selected, some lenders may be able to approve your mortgage in as little as 24 hours. The average number of days from application to approval will vary from lender to lender. However, 7-10 business days is typical.
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How quickly can a lender close on my home loan?
Many lenders can facilitate closing 2 to 3 weeks after you have agreed on a purchase contract for a home. If you need more time, you can take as long as you need, while still closing prior to any rate lock expiration dates. Many lenders require 30-60 days from purchase contract and application to closing.
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What is prepaid interest?
This is the interim interest that accrues on the mortgage loan from the date of the loan closing to the beginning of the period covered by the first monthly payment. For example, if your closing date is scheduled for June 15, the first mortgage payment is due August 1. The lender will calculate a per-day interest amount that is collected at the time of closing. This amount covers the interest accrued from June 15 to July 1. Some lenders prohibit the collection of pre-paid interest.
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What is the difference between 'locking' and 'floating'?
A lock gives you a specified period of time - usually 60 days - of protection from financial market fluctuations in interest rates by setting the range of pricing available to you. If you choose to 'float' or defer 'locking,' your rate will fluctuate with the market and will be subject to both upward and downward movements in the market. The benefit to floating is if interest rates were to decrease, you would have the option of locking in at a lower level of rates.
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What is the difference between APR and interest rate?
The APR reflects the cost of your mortgage loan as a yearly rate. It also incorporates the cost to obtain the loan, such as discount fees and loan origination fee. The interest rate is the actual note rate.
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When can I lock and how much does it cost?
Most lenders will allow you to lock once you have found a property and as late as up to five business days before closing. Some lenders may allow you to lock prior to finding a property. Rate locks and fees vary by lender.
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be available in your area. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A.
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