When a Buyer embarks on the Home Purchase adventure, Mortgages are one of the most commonly confusing or misunderstood pieces to the puzzle.
Having a great Realtor/Lender team can really make or break your Home Buying experience. Your Realtor and Lender are there to answer your questions and enable you to make well educated and informed decisions. A good Lender will walk you through each step and look out for your best interest, considering how much you want to spend monthly rather than trying to max out your budget which can leave you feeling house poor. In addition to ensuring smart financial decisions, all the costs associated with purchasing a Home should be laid out so once you are under contract, you are prepared for what it will cost from Contract to Close.
I’ve invited one of Watson Mortgage’s in house Loan Originators, Devon Redding, to answer some questions about what the process looks like and to explain terminology like ‘points’ and ‘Mortgage Insurance’. But first, lets find out a little more about Devon before she jumps into the tough stuff.
Alright Devon, where are you from? Where did you go to school?
My name is Devon Redding and I relocated to Jacksonville in 2009 from Northern VA. I attended Jacksonville University and now consider JAX “home!”
How long have you been a Loan Originator?
I have been in the loan business for almost 4 years and a Loan Originator for 2 years.
How’d you get into the Mortgage business?
I have a passion for numbers (and HGTV).
What’s your favorite part of your job?
My favorite part is sitting down with my customers at the closing table! I love to be apart of such a pivotal point in someone’s life.
If you could travel anywhere in the world, where would you go?
My dream is to backpack through Indonesia one day.
Ok, onto Mortgage 101:
What’s your best advice to a first-time home buyer?
Don’t stress! The right Loan Originator and Realtor team will make you feel relaxed and informed, trust them!
What should buyers be prepared for when applying for a loan?
In some cases your Loan Originator will need more documentation while finishing a pre-qualification.
What is Mortgage Insurance (MI)?
Mortgage Insurance is required when a buyer does not put 20% down on a Conventional loan.
Do Buyers have to put 20% down? Are there other options?
No, buyers don’t have to put 20% down, there are even loan programs that will cover the down payment!
Should Buyers only talk to one Lender or should they shop around? Why?
I always encourage people to shop around. Lenders have different products and fees, get yourself knowledgeable to what’s out there.
What are points?
A “point” is 1% of the loan amount. By charging a borrower points, a lender can secure a reduced interest rate on a home loan.
What are additional costs of ownership that a first-time home buyer should be prepared for? How much are closing costs?
I like to have my first-time home buyers create a budget to help them understand what bills they will encounter; everything from the electric bill to dog food! Closing costs do vary, but the safest guess is budgeting 3-4% of the purchase price.
What documentation does a buyer need to solidify a mortgage quickly and efficiently?
The best starting point would be gathering 1 month of pay stubs, 2 months of bank statements, 2 years of tax returns, 2 years of W2 or 1099’s, and make sure you have your social security card and up to date license.
Is homeowners insurance optional?
Homeowners Insurance is not optional when financing a home.
Any last words of advice?
Try not to get overwhelmed, educate yourself and ask lots of questions!
I hope this has been helpful to some first timers or anyone who didn’t understand certain aspects of the process. If any readers have more questions or would like to talk to Devon about qualifying for a mortgage, you can reach her at any of the below numbers/email address.
Of course, if you have any other questions about buying or selling, I would love to talk more: email me at firstname.lastname@example.org or give me a call at 904.803.6575
Ms. Devon Redding
NMLS #1451318 | FL LO47979