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How do I prequalify? Prequalify vs. apply About credit reports Down payment What are points? Buying a condo Insurance Ready for closing?
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Riverton, NJ 08077
ph: 856.829.9448
fx: 856.829.2985
info@hlfmortgage.com
Branch office
700 Route 130 N
Suite 103
Cinnaminson, NJ 08077
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Frequently Asked Questions

How do I get prequalified?

Before you begin the home buying process, it is essential to know how much you can pay for a home. We can make this easy for you, by pre-qualifying you at no cost or obligation before you and your real estate agent begin looking for a home. A prequalification is free and can usually be done in just one visit, or even in one phone call. There is no cost or obligation on your part. By getting pre-qualified, you will know what price home you can afford and what your monthly payments will be.

What is the difference between applying for a loan and getting pre-qualified?

Before you begin to look for your home, it is important that you visit a home loan lender, who will analyze your assets, debts, and sources of income. Based on the preliminary analysis, they will tell you the amount of loan for which you qualify: this is called a prequalification. Once you find the home you want to purchase, you can then formally apply for your loan, and they will ask you to provide the necessary documentation (e.g. paystubs, bank account information, etc.) to verify that the information you provided during your pre-qualification is accurate.

What is a credit report?

A credit report contains your payment history, shows that you paid your debts on time, if you have ever been late in making payments, or if you have ever failed to make payments. Lenders use the credit report to determine a potential borrower's ability to make timely payments, and to judge whether or not the person would make a good prospect for a loan. If you are thinking about buying a home, you will need to show us that you can make your payments in a prompt and responsible manner. We recommend that if you do not have any purchases on credit, that you at least get a credit card, in order to establish a payment history. You can ask your home loan consultant for suggestions as well.

What do I need to bring when I apply for a mortgage?

When you apply for a mortgage, you need to show proof of assets and income. Here's what you'll need to bring:

Assets
Complete (all pages) bank statements for most recent two months for the following types of accounts:

  • Checking
  • Savings/Credit union
  • IRA, 401K and Keough
  • Investments and stocks
  • Gifts: complete details of all monetary gifts

    • Please note that all statements must be bank-issued; we cannot use printouts of online account information.

    Income

  • Signed copy of Agreement of Sale or, if you are refinancing, a copy of your Deed;
  • Pay stubs showing income for last 30 days;
  • W2's for last two years;
  • Names, addresses and phone numbers of employers for past two years;
  • Details of all other continuing income sources

    • If you are self-employed or earn commissions, please bring the following additional documentation:

  • Signed copies of last two years federal tax returns (1040's) with all schedules
  • Copy of partnership return for last two years, if applicable
  • Copy of corporate return for last two years
  • Current balance sheet
  • Most recent profit & loss statement (no more than 120 days old)

    • You will also need to bring your driver's license or other government-issued photo identification, as we'll need to make a copy of it for your file.

    How much money do I need for a down payment?

    It all depends on how much you want to pay for a home and how much money you have available. If you do not have much money available, there are government programs that have been created to help first-time homebuyers. We offer a variety of loans that can normally accommodate each borrower's needs. Some of these programs have less stringent qualification guidelines, while others require little or no down payment. In many cases, the money needed for the closing can be incorporated into the loan amount, reducing the amount of money a borrower needs to have on hand to purchase a home.

    What are points?

    Points are the costs to secure a lower interest rate. One point is equivalent to 1% of the dollar loan amount. The more points you pay on a loan, the lower your interest rate.

    Are the requirements for the purchase of a condominium the same as for a house?

    The necessary documentation to qualify for a loan is the same for condominiums as for houses, no matter what size they are. Whenever you go apply for a loan, make sure to take your last three bank statements, your tax declarations for the past two years, and your last two paystubs.

    What types of insurance will I need for the closing?

    You will need to present proof of at least two types of insurance in order to close on the home. The first is homeowner's or hazard insurance, which protects your home in case of a fire or other catastrophe, and protects you in case someone is injured on your property. The second is title insurance, which protects you and the lender against losses due to disputes about the ownership of the property or any legal demand against it. Additionally, if your down payment is less than 20%, you will also need mortgage insurance (PMI).

    What should I do before the closing?

    It is very important to keep in mind that, prior to the closing, you should be certain that all conditions you specified in the sales contract have been met. If the owners need to do any repairs to the home, make sure that they have completely finished them. And prior to signing any document, we recommend that you make sure that all the information in it is correct.