What things should I avoid after applying for a mortgage
ANSWER: Don't change bank accounts
Don't apply for new credit accounts
Don't close any credit accounts
Don't deposit any cash into your bank account before speaking to your loan advisor
Don't make any large purchases
Don't co-sign on any loans for anyone
What are Closing Cost
ANSWER: The Federal Trade Commission (FTC) defines closing costs as: “The upfront fees charged in connection with a mortgage loan transaction. . . . generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.” Basically, your closing costs cover the fees for various people and services involved in your transaction. NAR says to budget for roughly 2-5% of the home’s purchase price. Freddie Mac sums up why this matters to you and your homebuying journey like this: “If you’re in the market to buy a home, your down payment is probably top of mind. And rightly so – it’s likely the biggest cost of homebuying. However, it is not the only cost and it’s critical you understand all your expenses before diving in. The more prepared you are for your down payment, closing and other costs, the smoother your homebuying journey will be.”
What is an Earnest Money Deposit (EMD)
ANSWER: While it isn’t required, an earnest money deposit is common in today’s highly competitive market. It’s money you pay as a show of good faith when you make an offer on a house. First American explains how it works: This deposit is typically held in trust by a third party and is intended to show the seller you are serious about purchasing their home.Upon closing the money will generally be applied to your down payment or closing costs. In other words, an earnest money deposit could be the very first check you’ll write toward your purchase. The amount varies by state and situation, but realtor.com says you can typically plan for 1-2% of the home’s purchase price. Work with a real estate advisor to understand any requirements in your local area and determine if it’s something that could be an option for you.
What is a Notice of Default?
ANSWER: A Notice of default is a public notice filed with a court which states that a mortgage borrower is in default on a loan. This is one of the initial steps toward foreclosure. A notice of default and subsequent foreclosure actions will be documented and disclosed to all credit bureaus. Hence, all foreclosure proceedings and actions can have severe repercussions on a borrower’s credit score. This will also negatively impact the borrower’s ability to obtain a mortgage or any type of debt in the future.
What states allow Non-Judicial Foreclosures?
ANSWER: The following states allow non-judicial foreclosures: Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Georgia, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Carolina, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wyoming.
What is a Foreclosure?
ANSWER: A foreclosure is the legal practice where your mortgage company secures ownership of your home. Basically, they repossess the property. A foreclosure occurs when the homeowner has failed to make payments and has defaulted or violated the terms of their mortgage loan agreement. A foreclosure can typically be avoided, even if you already received the foreclosure notice. A foreclosure can wreak havoc on your credit score. You must talk with your lender and take action as soon as possible.