Maryland Refinance Mortgage Rate Quote

Maryland Purchase Mortgage Rate Quote

Borrowers use purchase mortgages to acquire new homes,
second homes, investment properties and vacation properties.
The type of new home loans available are FHA, VA and
Conventional. The loan limits and requirements vary for
each home loan type. In addition, the
rates and guidelines vary based on the
property type. For investment, second and
vacation homes it is best to get the
guidelines from




local lender. Also, rules can vary from state to state.
It is simplest to go through each new home loan type and
present the standard guidelines and general loan requirements
on primary home purchases.

FHA New Home Loan
FHA loans are insured by the Federal Government and run by
the Department of Housing and Urban Development.

A purchase is utilized by consumers to help finance the
acquisition of a home.

95% Conventional
97% FHA Loan
100% VA loan

Although the Federal Government oversees the program the actual capital lent is from
individual lending institutions. These institutions can be Banks, Capital Firms,
Mortgage Brokerage house and other financial institutions. They ‘write’ the loan using
the guidelines set forth by HUD. These guidelines are FHA requirements and the
underwriter that approves the loan has to make sure that the borrowers and the
property meet FHA guidelines

Income - Borrowers should have an established income for two years. If there is no
two year history of employment due to schooling then the borrower(s) should have an
offer letter showing guaranteed job with income.
In addition, two months worth of pay stubs should be saved prior to applying.
Part time income should only be included if it is guaranteed and has been present for
two years.

Reserve and Assets - There is no clear stated amount of reserves but regularly two
months of purposed PITI (Principle-Interest-Taxes-Insurance) and any HOA or Condo
fee be in reserve. Meaning, this accessible cash should be ‘seasoned’ in some form.
‘Seasoned’ refers to establish moneys not cash hidden under the mattress or flavored
with salt and pepper (some humor).

Down payment and Closing Cost -  The 3% down payment should also be seasoned.
Be sure to keep track of the paper trail when withdrawing the moneys and making
them accessible for closing. If the money is withdrawn from a retirement account be
sure to keep statements. In additional, if it is an allowable for the moneys for closing
and down payment to be gifted, keep the statements from the person gifting’s
account. Both withdraws and deposits into the borrowers account.

Credit - Regularly, two years of credit history is recommended with 3 open and active
credit lines in good standing. Although scores are not the main determination in credit
approval a score of 660 or better would be recommended and scores over 720 are
considered excellent.

Property - The property must be appraised by a FHA appraiser and meet FHA
requirements.

Income - Borrowers should have an established income for two years. If there is
usually a requirement that work history be established for a minimum of two years.
If job change has occurred recently then the current employment information and the
previous employment information should be provided. It is usually best if the new
employment is in a similar profession as the previous employment an that there is
little lag time between both employments.If there is little history of employment due
to schooling then the borrower(s) should have an offer letter showing guaranteed job
with income. It is preferred if the employment is in the same profession as the
schooling trained. Two months worth of pay stubs should be saved prior to applying
and two years of W2's. If self employed then 1099 and a Profit and loss statement
from an accountant is recommend to help prove income. Part time income should only
be included if it is guaranteed and has been present for two years.

Reserve and Assets - Regularly a minimum of two months of reserves is required.
Larger amounts of reserves will assist in the approval process. At minimum two months
of purposed PITI (Principle-Interest-Taxes-Insurance) and any HOA or Condo fee
needs to be in reserve. Meaning, this accessible cash should be ‘seasoned’ in some
form.

Down payment and Closing Cost -  The standard 5% down payment should also be
seasoned. Be sure to keep track of the paper trail when withdrawing the moneys and
making them accessible for closing. If the money is withdrawn from a retirement
account be sure to keep statements. Gifts may not be allowed for down payments
depending on the lenders guidelines. Convectional home loans vary greatly by lenders
and states. Most lenders will allow for down payments as low as 5%. More often,
borrowers try to do a 20% down payment to avoid mortgage insurance. There may
also be a second mortgage used to pay for a down payment. But be sure to include
the new second down payment and loan when trying to qualify for the primary loan.

Credit - Regularly, two years of credit history is recommended with 3 open and active
credit lines in good standing. Credit scoring is used in determining credit approval.
A score of 680 or better would be recommended and scores over 720 are considered
excellent.

A Certificate of Eligibility is required for VA Home Loans -  the VA does provide
online instructions for getting the COE.

Income - Borrowers should have an established income for two years. If job change
has occurred recently then the current employment information and the previous
employment information should be provided. It is usually best if the new employment
is in a similar profession as the previous employment an that there is little lag time
between both employments. Two months worth of pay stubs should be saved prior to
applying and two years of W2's. If self employed then 1099 and a Profit and Loss
statement from an accountant is recommend to help prove income.

Reserve and Assets - Regularly a minimum of two months of reserves is needed.
Larger amounts of reserves will assist in the approval process. If required, a minimum
two months of purposed PITI (Principle-Interest-Taxes-Insurance) and any HOA or
Condo fee needs to be in reserve. Meaning, this accessible cash should be ‘seasoned’
in some form.

Down payment and Closing Cost -  The VA is unique in that it will fund 100% of the
purchase price and may also allow for additional fees to be included in the loan. A
funding fee is required but may be waived if the veteran has a permanent disability
approved by the VA. If a down payment is needed than it should be seasoned.
Be sure to keep track of the paper trail when withdrawing the moneys and making
them accessible for closing. If the money is withdrawn from a retirement account
be sure to keep statements. Gifts may not be allowed for down payments depending
on the lenders guidelines.

Credit - Regularly, two years of credit history is recommended with 3 open and active
credit lines in good standing. Credit scoring is used in determining credit approval.
A score of 620 or better would be recommended and scores over 720 are considered
excellent.

Property - The property must be appraised by a VA appraiser and meet VA
requirements. The loan limits vary dependant on the property locations. Find out
what the VA loan limit is in your desired new home’s area.

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