Home Loan Process

November 8 2022

Avoiding Delays to Underwriting: Responses, New Credit, Employment

In part one of this two-part blog series, we went over some of the basics on what mortgage underwriting is, plus how to avoid any actions that might delay this important process. Underwriting is the process in which loan officers review and hopefully approve your loan application, and it’s one you want carried out as smoothly as possible.

At Primary Residential Mortgage, we’re happy to offer a wide range of home loan programs and some of the best mortgage rates in Branford and nearby areas. We’re happy to walk you through this entire process, including underwriting and everything that goes into it. Here are a few of the other tips we can offer on how to avoid delays during underwriting.

Respond Quickly to Lender Correspondence

During the underwriting process, you’ll receive many forms, letters and requests from your lender. Sometimes these can be a bit overwhelming – there’s certainly no shortage of paperwork involved in a mortgage loan application!

But it’s important to respond to all correspondence quickly, even if the request seems simple or straightforward. Many borrowers try to put off reading and responding right away, and as a result, they end up facing a delayed closing date.

Avoid any New Credit Applications or Major Purchases

It’s also essential that you avoid opening any new credit accounts while underwriting is in progress. Even seemingly innocent inquiries like checking your own credit score or applying for student loans can affect the underwriting process – and in some cases, delay your home loan approval.

Down similar lines, avoid any large purchases that might require credit approval, such as buying a car or furniture. If you do want to make a big purchase, speak with your lender first so they can advise if the purchase will affect your loan approval.

Try to Hold the Same Job

While we know there are situations where you’ll only have so much control over your employment situation (i.e., you don’t have a choice if you’re laid off or the company goes through downsizing), it’s best if you can try to hold the same job throughout the mortgage underwriting process.

Changes in your salary, job title and/or employer could result in delays during the underwriting process, especially if your lender has to verify the change in employment. If you do have a change at work, check with your lender to see how big of an effect it might have on underwriting and whether they need documentation to support the change.

With some basic understanding, you can hopefully avoid most of the potential problems and delays during mortgage underwriting. Remember that your lender’s goal is to help you move into your new home as quickly as possible and a smooth underwriting process will get you there!

If you have any questions about this, or any of our mortgage rates or quality home loan programs, speak to our team at Primary Residential Mortgage today.

*PRMI NMLS 3094. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms, and conditions are subject to change and are subject to borrower(s) qualification. This is not a commitment to lend. Opinions expressed are solely my own and do not express the views of my employer.

avoiding delays underwriting application

October 11 2022

Avoiding Delays to Branford Underwriting: Application, Transparency

chrishauman Home Loan Process, News

There are a few important processes that will almost always take place during any kind of mortgage acquisition and home purchase, and one of these is known as underwriting. Typically taking place in the month or so before your purchase is set to take place, underwriting involves a full review of finances and some related elements to ensure everything is in order — and there are a few things that may delay this process in some cases.

At Primary Residential Mortgage, we’re proud to offer a wide variety of home loans to our Branford and nearby clients, plus assistance with the entire process. What exactly is underwriting, and what are some things you can do to do avoid any delays and help this process move along expediently? Here’s a basic primer.

What is Mortgage Underwriting?

For those who haven’t been through the home loan process before, underwriting may sound like a complicated and unnecessary step — but it’s actually quite important. This is the process by which loan officers review all submitted documentation to determine whether or not an applicant qualifies for a given mortgage, and it’s also when they’ll evaluate what kind of risk is involved in approving the loan.

Underwriting is also when the loan officer will calculate the maximum loan amount they’re willing to extend, based on things like credit score, employment history, and your current debt-to-income ratio. In some cases, they may request additional documentation or clarification on certain items — and if everything looks good, they’ll give their final approval and the loan can move forward.

There are a few different things that can cause delays during underwriting, from simple oversights to more complicated financial issues. Our next several sections will go over how you can position yourself to avoid any such delays.

Fully Complete Application

When you’re filling out and submitting your loan application, it’s important to be as complete and accurate as possible. This not only gives your loan officer the best chance to understand your current financial situation, but it also helps them determine if you’re eligible for certain programs or discounts. Incomplete applications will almost always cause delays in underwriting, so be sure to take your time and get everything right.

Be Completely Transparent

Another thing to keep in mind is that your loan officer needs to have a complete picture of your financial situation — and that means being completely transparent about things like your income, debts, and assets. Trying to hide anything from your loan officer will only cause delays down the road, so it’s always best to be upfront about everything from the start.

In part two of our series, we’ll go over some further ways to ensure your underwriting process doesn’t get delayed during a home purchase. For more on this, or to learn about any of our mortgage rates or home loan programs in Branford, speak to our team at Primary Residential Mortgage today.

August 9 2022

Predatory Lender Red Flags: Rushing, No Credit, Blank Fields

chrishauman Home Loan Process, News

There are sadly a number of areas in our world where unscrupulous people or entities try to take advantage of others financially, and the realm of loans is one of them. Predatory lenders can be found in many areas of the loan world, and unfortunately the area of mortgages is not an exception to this.

At Primary Residential Mortgage, we’re happy to serve as a comprehensive mortgage lending company with a great staff and long track record of reputable dealings — and more than that, we’ve helped many clients recognize the signs of predatory lending from other entities, and avoid them. What are some of the key red flags that often signal a lender who is not actually trying to help you, but rather to take advantage of you? Here are several in this two-part blog series.

Rushing You Every Step of the Way

The mortgage application and acquisition process is a significant one, and it typically takes some time to complete. A predatory lender, on the other hand, will try to push you through the process as quickly as possible without giving you adequate time to understand what’s going on or make decisions.

They may tell you that rates are going up soon so you need to act fast, or that there’s only a limited amount of funding available and you need to take advantage of it now. In reality, these may be scare tactics to try and get you to make decisions before you’re ready.

A reputable lender will want to make sure that you understand the process and feel comfortable with the decisions you’re making every step of the way. If your lender is rushing you, it may be a sign that you should look elsewhere.

Lack of Credit Check

Your credit is a vital part of the mortgage process, and any reputable lender will pull your credit score as part of their assessment of you as a borrower. If a lender doesn’t check your credit score or history, it may be because they’re not actually interested in whether or not you can repay the loan — all they care about is getting their hands on your money.

Telling You to Leave Blank Paperwork Fields

Another common tactic used by predatory lenders is telling borrowers to leave blanks in key areas of the paperwork, such as income or employment information. They may tell you that the underwriter will fill it out later or that it’s not important. In reality, this is just another way to try and get you to complete the process quickly without fully understanding what you’re agreeing to.

In many such cases, the predatory lender will go in after the fact and fill in the paperwork with whatever information they want, which may not be accurate. This can lead to a situation where you’re unable to repay the loan because it’s based on false information, and the lender can then come after you for the full amount of the loan plus interest and fees.

In part two of our series, we’ll go over further red flags that might indicate a predatory lender. For more on this, or to learn about any of our mortgage rates or home loan services, speak to the team at Primary Residential Mortgage today.

affording down payment savings investments

July 12 2022

Affording a Guilford Down Payment: Savings, Investments, Gifts

chrishauman Home Loan Process, Loans, News, USDA Loans

In part one of this two-part blog series, we looked into some basics on how you can receive assistance in affording a down payment on a home. There are a number of resources here, from low down payment mortgage programs to government assistance and several more — and being aware of these might make a big different for your homebuying approach.

At Primary Residential Mortgage, we’re here to offer a wide range of mortgage rates and home loan services to clients in Guilford and nearby areas, including assistance with everything surrounding your down payment. What are some other options available to you as you look for ways to afford a down payment on the home of your dreams? Here are a few.

Withdrawals or Loans from Retirement Savings

There are certain down payment options that will require some definite care and consideration before moving forward, and this is one of them. You may be able to take a loan or withdrawal from your 401(k) or other retirement savings, but there are some things you should know first.

This method may help you avoid paying taxes and penalties on the withdrawals, as long as you repay the account within five years — though you will still have to pay interest on the loan. It’s important to speak with a financial advisor before taking this route, as it could have some serious implications for your retirement down the line if not done correctly.

Selling Investments or Other Assets

This is another method that should be approached with caution, as it can have long-term effects depending on what you’re selling. That said, selling investments or other assets can be a quick way to come up with the cash you need for your down payment.

Before taking this step, it’s important to consult with a financial advisor to see what kind of effects selling these assets could have on your long-term financial security. They may have some recommendations on how to best go about this.

Down Payment Gifts or Loans from Family

Another route some homebuyers take is to receive a down payment gift or loan from family members. This can be a great way to come up with the money you need without having to worry about the implications of taking out a loan yourself.

Just be sure that any gift or loan is properly documented so that there are no issues further down the line. Your mortgage lender will likely have some specific requirements for this.

USDA 100% Financing

If you live in a rural area, there’s a reasonable chance you qualify for a USDA loan from the US Department of Agriculture, which are meant primarily for those who live and work in these areas, such as farmers for instance. Such loans come with 100% financing and no required down payment, so if you’re able to qualify here, the down payment ceases to be a concern for you whatsoever. All of Guilford qualifies for this loan based on geographic location, so get in touch with our team to learn more about it!

These are just a few of the many options available to you when it comes to affording a down payment on your home. For more on this, or to learn about any of our quality mortgage services to clients in Guilford and surrounding areas, contact our team at Primary Residential Mortgage today.

June 14 2022

Affording a Down Payment: Mortgage Programs, Government Assistance

chrishauman FHA Loans, Home Loan Process, Loans, VA Loans

There are several financial considerations you’re likely making while entering the market for a new home, and one of the most significant here for most buyers is the down payment. Referring to a percentage of the overall home purchase price that you will pay up-front in a lump sum format, your down payment is important for a number of reasons, including helping you get more favorable mortgage rates and terms for your loan.

At Primary Residential Mortgage, our team of loan officers is happy to assist with down payment savings and approaches for any of the loan programs we offer to our Guilford clients. What are some of the best approaches to ensuring you can afford a down payment that puts you in a quality position for your mortgage and financial picture? Here’s a primer in this two-part blog series.

Consider a Mortgage Program With Low Down Payments

For many borrowers, including first-time homebuyers, the biggest obstacle to homeownership is coming up with the required down payment. The good news is that there are mortgage programs available that allow for low or even no down payments. Here are some examples:

FHA Loans: Offered by the Federal Housing Administration, these loans only require a 3.5% down payment for qualified borrowers. Keep in mind, however, that you’ll be required to pay mortgage insurance with an FHA loan, which will increase your monthly payment.
VA Loans: Available to active-duty military members, veterans, and their surviving spouses, VA loans offer 100% financing. That means no down payment is required. You will, however, be required to pay a funding fee, which can be rolled into your loan amount.
USDA Loans: Offered by the U.S. Department of Agriculture, these loans are available to borrowers in eligible rural areas and provide 100% financing. As with a VA loan, you will be required to pay a funding fee.
Conventional loans: While many think of conventional loans as those that steadfastly require 20% down in all cases, this is not true in many circumstances. It’s often possible to get conventional loan down payments as low as 3% depending on your situation, something you should discuss as an option with your lender.

Consider State or City Down Payment Assistance Programs

For others, the issue isn’t necessarily that they can’t come up with the funds for a down payment, but rather that they would prefer to use their savings for other purposes, such as emergency funds or retirement. If this is the case for you, there are a number of programs available that can help with your down payment.

Local and state governments, as well as a number of nonprofit organizations, offer down payment assistance programs to help eligible buyers with the funds they need for a down payment. These programs often have specific eligibility requirements, so it’s important to do your research to see if you qualify.

While some of these programs are targeted specifically at low-income buyers or buyers in certain geographic areas, others are open to a wider range of buyers. Consider your options in your state if you’re going down this path.

For more on how to afford a down payment for a home, or to learn about any of our mortgage rates or quality home loan services in Guilford or nearby areas, speak to the pros at Primary Residential Mortgage today.

May 10 2022

Home Size Factors: Current Home, Maintenance, Storage

chrishauman Home Loan Process, Loans, News

In part one of this two-part blog series, we went over some of the simplest factors that are typically involved when you’re looking to determine the ideal home size to pursue on the market. From the size of your family to your future plans and more, there are a number of considerations here as you make this important choice.

At Primary Residential Mortgage, we’re proud to serve as top mortgage lenders in the Guilford and Branford areas, providing clients not only with a wide selection of home loans, but also help with the entire process of purchasing a home. Today’s part two of our series will look at some of the other important elements you should be thinking about as you determine your ideal home size while hitting the market.

Size of Current Home

If you’re already in a home currently, whether you own it or are renting, then this is a great place to start when you’re determining the size of home you should look for. If your current home has plenty of space and roominess, then it will be much easier to go with a larger home than if your current living situation doesn’t allow for much breathing room, or if you have hobbies that require a good deal of space that your current home doesn’t provide.

Operations and Maintenance Costs

Naturally, the larger the home you consider purchasing, the more it will cost to maintain moving forward. From taxes and utilities to routine maintenance and everything in between, ensuring that you can handle the costs of owning a home is important at all times, but especially when your new home is bigger than what you’re used to living in.

This is a key consideration to make as you’re looking to determine the ideal home size for your needs. We’ve seen some buyers simply fail to account for these things, and they often have to make sacrifices elsewhere or end up in difficult financial situations as a result.

Storage Needs

When you’re looking at homes on the market, always think about your storage needs both inside and outside of the home. If you have a lot of belongings, whether it’s clothes or holiday decorations or anything else, then you need to make sure that your new home can accommodate those things.

The same goes for any outdoor storage needs you might have, such as a shed or garage. If you don’t currently have space for these things but know you will want or need them in the future, make sure to look for a home with this type of storage already available to you.

For more on how to go about determining the ideal home size for your and your family’s needs, or to learn about our mortgage rates, home loan options or related services, speak to the team at Primary Residential Mortgage today.

April 12 2022

Home Size Factors: Family and Time at Home

chrishauman Home Loan Process, Loans, News

There are several important considerations to be making as you hit the home market to purchase the home of your dreams, and one of the simplest — but often most important — is the general size of home you’re looking for. While you certainly don’t need to have a precise square footage in mind, as that would be unrealistic, it pays to have at least a general idea of the space you need why you need it as you head into home tours and other parts of this process.

At Primary Residential Mortgage, we’re happy to assist a variety of clients with all their mortgage and homebuying needs, with home loan programs ranging from fixed-rate and adjustable rate options to several specialty programs like FHA loans, jumbo loans and more. We’re also here to answer questions and help you with many of the simple ins and outs of this process. What should you be thinking about when it comes to the size of home you’re looking for? This two-part blog series will go over several basic factors.

Current and Future Family Size

One of the single most important variables impacting the size of home you’re looking to purchase is your current and future family size. Obviously, a family of four is going to have different needs than a single person or couple just starting out — more bedrooms, more bathrooms, additional storage and so forth.

However, you shouldn’t just be thinking about your current needs. You should also have an idea of any potential changes on the horizon, such as whether you expect to have children in the near future or if elderly parents may need to come live with you at some point down the road. Planning for these kinds of contingencies now can save you a lot of headache (and expense) later on.

Time Spent at Home

Another element to consider is how much time you actually spend at home. If you work from home or have small children, you’re obviously going to be spending more time in the house than someone with a 9-to-5 job and no kids. This means that factors like square footage per person become less important, as there will be more people using the common areas of the house at any given time.

On the other hand, if you’re rarely home or have older children who are out of the house more often than not, you may be able to get away with a smaller place. In this case, it may make more sense to focus on factors like lot size and location rather than overall square footage.

In part two of our series, we’ll look at some additional areas to cover. For more on this, or to learn about any of our mortgage rates or home loan services, speak to the team at Primary Residential Mortgage today.

March 8 2022

Ratified Contracts: Tips for Branford Homebuyers

chrishauman FHA Loans, Home Loan Process, News

In part one of this two-part blog series, we went over some basics on ratified contracts within the realm of mortgages. Ratified contracts are legally-binding contracts between buyers and sellers of a home, containing many pieces of important information that are not only required by law, but also play an important role in the transferring of homeownership from one party to the other.

At Primary Residential Mortgage, our team of loan officers provides numerous resources for Branford clients throughout the process, including a mortgage checklist and many other areas of expertise for you to lean on. We’ll help you understand exactly what’s included in your ratified contract and what you need to know about it, including important dates and related themes. Today’s part two of our series will go over a few additional concepts to keep in mind when it comes to the ratified contract.

Who Provides a Ratified Contract?

In nearly all cases, either your real estate agent or loan officer will provide the ratified contract to you. It’s important to remember that you should never sign a contract until you have had a chance to fully review it, even if someone is pressuring you to do so. Doing so could have serious consequences down the road.

Keep in mind that there are some situations in which the seller will provide the ratified contract to the buyer. If this is the case, it’s important to be especially vigilant in reading through every detail and understanding what you’re agreeing to.

Other Parties Involved

Here are the various parties involved in the signing and processing of the ratified contract, beyond you and the home seller that is:

Title company: The title company is responsible for performing a title search on the property and ensuring that there are no outstanding liens or other legal issues that could impact the sale.
Lender: If you’re taking out a mortgage to finance the purchase of the home, your lender will be involved in the process as well. The lender will need to approve the contract and provide final funding.
Real estate agent: The real estate agent represents the seller in the transaction and is responsible for negotiating on their behalf, among other things.
Escrow company: Escrow companies act as a neutral third party in transactions, holding money and documents until all conditions of the contract have been met.

What Happens After the Contract is Signed?

Once the contract is signed, you will assume ownership of the home — and your payments will begin. In most cases, the seller will vacate the home on or shortly after the closing date, which is when the title officially transfers to you.

Keep in mind that there may be some contingencies in the contract that need to be met before everything is finalized. These could include things like obtaining a mortgage, passing a home inspection, or getting the title cleared. Make sure you understand what you’re responsible for and when each step needs to be completed in order for the sale to go through.

For more on ratified contracts in the mortgage and homebuying realm, or to learn about any of our Branford mortgage services, speak to the pros at Primary Residential Mortgage today.

ratified contracts importance homebuying

February 8 2022

Ratified Contracts: Basics and Importance in Homebuying

chrishauman FHA Loans, Home Loan Process, News

There are a few documents that are very important during a mortgage and homebuying situation, and one of these that’s pertinent to both the buyer and seller is known as a ratified contract. Referring to a contract that’s typically created near the end of a homebuying process, once the details and conditions of the sale have been finalized, this contract is one of a few vital pieces of information that legally binds the sale.

At Primary Residential Mortgage, we’re happy to offer a huge range of mortgage programs for our Branford clients, and also to assist them with many of the documents or similar needs that come up during the mortgage and homebuying process. What is a ratified contract, why is it important, and what else do you need to know about it? This two-part blog series will cover all the pertinent details.

Ratified Contract Basics

A ratified contract refers to a written, legally-binding contract between a buyer and seller of a home. Its most basic information will be the purchase price of the home and the closing costs being paid; other elements may include:

Inspections and any repairs required before closing day
Contingencies, such as financing or others, that may allow for termination of the contract prior to closing day
An expiration date of the contract

In most cases, the ratified contract will come along with a pre-approval letter from your lender, which states that you’ve qualified for funds and the lender is ready to advance said funds for the sale of the home.

For a contract to be considered ratified, it requires three steps:

Buyer’s offer acceptance: This is the point at which an offer has been accepted by the seller, and they’ve agreed to sell their home
Seller’s counter-offer: The seller has likely offered some adjustments to the contract details, and this is when they’re accepted
Signatures of both parties: This is the moment that formally ratifies the contract, and it’s also legally binding

Why Ratified Contracts Are Needed

There are a few specific reasons why ratified contracts are typically required:

State law: In nearly every state, purchase agreements for a home are not valid unless they are in writing, which is why they are usually ratified.
Finalizing details: At this time, things like inspections and home repairs may be done, along with other items that need to take place prior to closing day. Also at this time, any contingencies that allow for the contract’s termination are removed.
FHA loan: For those using the FHA loan program, a ratified contract is a strict requirement, and it must be in place before the FHA can release mortgage funds to the buyer.

For more on ratified contracts and why they’re important during a home sale, or to learn about any of our mortgage rates or quality home loan services in Branford or nearby areas, speak to the team at Primary Residential Mortgage today.

October 12 2021

Purchasing a Second Home: Common Reasons for Considering It

chrishauman Home Loan Process, Loans, News

While many have enough on their plate with ownership of a single home, some with the financial wherewithal may consider the purchase of a second home for a few different reasons. From generating increased income to potentially assisting with retirement, a second home may offer you several benefits depending on your situation.

At Primary Residential Mortgage, we’re happy to offer a variety of home loan options, including to clients who already own a home and are considering a second for a variety of reasons. Why might you be thinking about a second home, and what are some important factors to consider if you’ve decided to purchase one? This two-part blog series will go over all these elements and more, starting with common reasons our clients often go down this route.

Home for Parents

In many cases, individuals or couples consider the purchase of a second home to assist their aging parents. Many don’t want their parents to end up in a nursing home, but also may not have time to care for them in their own home — and this is where a second home might come in.

Many parents enjoy spending time with their family in this capacity, and you can spend extended visits to ensure they’re getting the care they need without having the burden of constantly caring for them. And if you purchase this home near your current location, you won’t have to travel far to see your parents whenever you wish.

Part of Retirement Planning

In other cases, a second home will actually be a strategic purchase that’s part of your retirement planning. For example, many younger individuals purchase a second home before they retire and sell it once retired to generate extra income. Not only does this allow you the freedom of traveling without having to actually own a travel trailer or RV, but also gives you an investment to watch and potentially grow over time.

The best part is, if your home isn’t technically for sale, it can’t dramatically affect your credit score when you apply for a second mortgage. This will save you from the struggle of trying to sell your home in a poor market and potentially having trouble finding lenders who will offer a traditional mortgage in this situation.

Trips and Vacations

For people or families who like to travel to the same place for a yearly vacation, purchasing a second home in this area can be an excellent investment. Not only will you have a place to stay free of charge, but you’ll also help strengthen both the economy and overall experience for everyone by increasing tourism in this area.

If you plan on living near your second home most of the year, it’s important to consider which community is best suited for this lifestyle. You might also want to consider how much you’d like to rent your home out versus using it exclusively for your own family. Making the right choice now could open up several doors for your second home down the line.

For more on why you might consider a second home purchase, or to learn about any of our mortgage programs, speak to the staff at Primary Residential Mortgage today.