Frequently Asked Questions
We hope the information below helps answer any questions you may have. If this is not the case, one of our team members would be more than happy to speak with you one on one!
Q. How can I ensure that I can afford a home?
A. As part of the process, we set an approximate maximum home purchase price and mortgage amount in line with your financial picture. Those amounts are based on your credit, income, assets and debts, and take into consideration how much you have for a down payment, as well as the affordability of monthly mortgage payments. There are many different types of mortgages, providing a great deal of flexibility in terms of rates, terms, down payment amounts, and income and debt guidelines. We can advise you of the right loan for your needs and means. If you want to “test the waters,” ask to get pre-qualified. This will give you a clear picture of what’s best for you in terms of appropriate loan programs, home price range, mortgage amount and monthly mortgage payments.
Q. Is a home inspection important?
A. After signing a purchase agreement, we strongly recommend hiring a professional home inspector even if it is not required. It is your decision and responsibility. An inspector can spot any problems with the home (including structural, maintenance and operational issues) that could save you headaches down the line, and even reopen price negotiations with the seller.
Q. What exactly is a "mortgage closing?"
A. It is the time when you sign your mortgage papers and pay any remaining costs, and we pay the seller. Highlights of this process are:
You review and sign loan documents at an agreed location such as an attorney or escrow office
You pay any remaining down payment and/or closing fees via certified or bank check or direct transfer to escrow
The signed mortgage documents are sent back to our offices
We disperse the purchase funds to the seller within two to three days
You receive the home’s deed and title and become a homeowner
Q. What documents do I need?
A. To apply for a mortgage, we require proof of income and assets, as well as debt obligations and expenses. Some examples of what you need are:
Income documents such as paystubs and W-2 forms
Asset documents such as bank account and investment statements
Monthly expense statements such as rent receipts and utility statements
Q. What costs are involved in a home purchase?
A. You do need to consider all costs ago determine how much money you will need. There are many different variables in available loan programs and closing costs. Some examples include:
Different loan products have different requirements for down payment. So you will need to be sure to clarify what your down payment will be.
While New Penn’s closing costs are minimal, there are third-party costs such as title insurance and attorney fees
Paying for ongoing obligations on the home such as property taxes and homeowner’s insurance are part of buying a home
With so many variables, it makes sense to consult with one of our mortgage specialists to understand potential costs for your particular situation.
Q. I have the purchase agreement, now how long until closing?
A. Your purchase agreement includes a mutually agreed-upon escrow period, which is typically 30, 45 or 60 days. The escrow period is when your loan is processed. It typically defines when your mortgage closes and you take ownership. However, there is no rule that says you cannot close sooner! At New Penn, our constant aim is an expeditious closing.
Q. What is the FICO score and how important is it?
A: A FICO score is a credit score which predicts the probability that borrowers will pay their bills. A higher FICO score enables you to obtain a loan with good terms, a lower interest rate and a lower monthly payment. This score is an important part of the loan qualification process.
Q. What is the LTV or loan-to-value?
A: The LTV, or Loan-to-Value ratio, is the amount of your loan compared to the appraised value of your property. This ratio impacts the loan programs and rates for which you will be eligible. Lenders will generally offer better loan programs and rates to borrowers with lower LTV ratios.