Five Steps to Obtaining the Right Mortgage

The Streisand Team

at STERLING NATIONAL BANK

Five Steps to Obtaining the Right Mortgage One of the most significant decisions you will make when purchasing a home is selecting a mortgage and a mortgage company. The right mortgage is critical to the home buying process, and should be planned out as carefully as possible. This process can be placed into five key steps for selecting a mortgage and for purchasing a home.

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Choosing Your Support Analyzing Your Finances Processing Your Loan Closing the Deal Going Beyond the Closing

1 Choosing Your Support When first entering the mortgage process, it is recommended that you seek out a team of professionals with whom you can rely on and consult. Your team of professionals should include a financial planner or accountant, a lawyer, a real estate broker, and a mortgage professional. It is important during this step to choose your mortgage professional first, because in dealing with a knowledgeable mortgage professional you will be provided crucial guidance towards your next steps.

A great way to start developing your plan is by contacting a mortgage professional that specializes in mortgage consulting. This type of service is generally free of charge, and should serve to answer all of your questions. The mortgage consultants familiarity with the home buying process not only ensures your mortgage process runs smoothly, but also may help you orchestrate the selection of the rest of your professional team.

When deciding upon which mortgage consultant can best serve your needs, some characteristics you should consider are: How long have they been in business? Do they provide a wide variety of mortgage products to choose from? What is their reputation in the mortgage world? And, how well do they communicate during the mortgage process?

During the selection process for a mortgage company, many people often let interest rate take priority. Although it is extremely important that your mortgage company be competitive in the interest rates they offer, choosing a company on the basis of rate alone may cheat you of all the qualities that a well-organized, service-sensitive company can offer. The mortgage process is very complex, and working with an experienced company with whom you are comfortable will help you navigate not only the mortgage process, but the home buying process as a whole.

Š 2012 The Streisand Team at Sterling National bank

www.streisandteam.com

The Streisand Team

at STERLING NATIONAL BANK

2 Analyzing Your Finances Qualified mortgage consultants should not quote interest rates to you until they are able to conduct an in-depth interview with you, where they will be able to gather as much information as possible. If done properly, your mortgage consultant will know and understand who you are and what you are trying to accomplish, as well as being able to define your needs and values.

Some of the things you can expect your mortgage consultant to discuss with you are:

• • • • • •

What can you afford?

What is your credit score?

How long do you wish to live in this home?

What does your personal financial statement look like today?

How much do you have available to put down on a home?

What are your financial objectives?

After your mortgage consultant is able to ascertain the above information, they will move forward in the process.

The next phase is known as the qualification phase, in which your mortgage consultant should:

• • • • •

Review your credit report, and create and analyze a profile of your credit history Review your income and assets Verify your occupation, employment history, and the nature of your industry Review your goals and objectives for buying your new home Gain an understanding of your short-term and long-term financial needs

Your consultant will take the information you have provided them with to determine what is sometimes referred to as your buying power, or the amount of income and assets you have available towards the purchase of your new home.

Next, your mortgage consultant may prepare a proposal detailing the various options that you may want to consider. A quality proposal should help to identify recommended mortgage programs, proposed monthly costs, and a good faith estimate of any additional costs for which you may be responsible.

The selection of a loan is dependent upon the amount of down payment you have available, the amount of money you wish to borrow, and a few other variables. Your mortgage company should provide you with a detailed analysis of these costs, as well as a thorough explanation of the differences in programs, also known as products.

© 2012 The Streisand Team at Sterling National bank

www.streisandteam.com

The Streisand Team

at STERLING NATIONAL BANK

Many of the most common mortgage programs you will see include:

A) Fixed-Rate Mortgages A Fixed-Rate Mortgage is a mortgage loan in which the interest rate will always stay the same, regardless of current interest rates increasing or decreasing. The mortgage term refers to how many years you have to pay off the entire loan. When choosing a fixed-rate mortgage, you have options such as 30 years, 15 years, etc.

B) Adjustable-Rate Mortgages An adjustable-rate mortgage is a mortgage that you typically have 30 years to pay off, but the interest rate you are charged is only fixed for a certain period of time, depending on the program.

For example, a 3 year adjustable rate mortgage would have a fixed rate for 3 years, as the program denotes. These programs come in the form of 3 years, 5 years, 7 years, etc.

Once the term for the initial interest rate has passed, your interest rate will then convert to whatever the current interest rate is in the market at the time, within certain “caps”. In addition, your mortgage will remain an adjustable-rate mortgage for the remaining years, until the loan is paid off in full.

There are many benefits to utilizing an adjustable-rate mortgage, as well as a fixed-rate mortgage. Your mortgage consultant will be able to provide you with which of these programs best suits your needs, and which of these programs affords you the best advantages for your own unique situation.

3 Processing Your Loan A mortgage consultant will also be responsible for overseeing the processing of your loan. Processing your loan involves obtaining all of your financial information and any other necessary documentation, plus ordering an appraisal for your new home. An appraisal involves an independent licensed appraiser visiting the property to determine its current market value. This is done primarily by comparing the subject property to other similar homes in the area, know as comparables or “comps”. During this time, your attorney will also be contacted to provide a Title Report, which upon completion will be sent to your mortgage consultant. It is recommended title work begin as soon as possible to avoid surprises related to open permits and/or liens on the property.

Once all documentation, including the appraisal and title report, has been received, it will be sent to a department in the bank known as underwriting. In the underwriting department, all of the information is analyzed further.

Once the bank’s underwriter has completed this process, they will contact your mortgage consultant to issue you what is known as a Conditional Commitment. A Conditional Commitment is a commitment to lend to you, issued by the bank, which is conditional upon the receipt of a short list of additional documentation, know as Conditions, Stipulations, (or “stips”).

Your mortgage consultant will then contact you to go over your short list of stips. Once your mortgage consultant receives the additional documents that are listed on your Conditional Commitment your file will be re-sent to the underwriting department. © 2012 The Streisand Team at Sterling National bank

www.streisandteam.com

The Streisand Team

at STERLING NATIONAL BANK

4 Closing Your Loan Upon receiving the final necessary documentation, the Underwriter will clear your loan for closing, also know as being cleared. To clear your loan for closing means that the underwriter has thoroughly analyzed all of the information you provided, and determines no additional documentation is needed.

Once your loan is cleared, your attorney will contact you and the attorney who represents the bank to set up a time to meet at the bank for your closing.

Before you attend your closing, your mortgage consultant should review your closing costs with you. Closing costs, sometimes referred to as settlement costs, include fees and expenses over and above the price of the property, typically due when the property ownership transfers. Closing costs will be those that are disclosed in a good faith estimate; examples of these costs include title searches, appraisal fees, and attorney fees.

At your closing, your attorney will be present to guide you through the loan closing documents; your mortgage consultant will also attend if you wish. You will be given a document known as a HUD or a closing statement, which explains the rights of the lender, presents the mortgage terms, and outlines any fees you are responsible to pay.

5 Going Beyond the Closing Mortgage consultants should take a personal interest in your mortgage loan, and will do their best to help ensure that you are taking advantage of current market conditions. This should include an annual review of your current loan and finances, to ensure that your financial circumstances have not gone through any significant changes.

Should a shift take place in the mortgage market, your mortgage consultant should also look to help you take advantage of the current circumstances.

Your mortgage consultant should also be equipped to guide you on your future financial planning, including the possibility of exploring the tax benefits that come along with having a mortgage. Depending upon your tax bracket and the rates that exist, there are major savings to be gained with careful tax planning. Your mortgage consultant should be able to either guide you on this in coordination with your accountant or financial planner, or if necessary, identify a competent financial professional to assist you.

Š 2012 The Streisand Team at Sterling National bank

www.streisandteam.com

The Streisand Team

at STERLING NATIONAL BANK

About The Author Lloyd J. Streisand is a CPA, Division Senior Vice President and Senior Loan Officer at Sterling National Bank, with 20 years experience in the mortgage industry. Based out of Great Neck, New York, Lloyd is also the senior member of The Streisand Team; a nationally-ranked mortgage origination team representing individuals seeking residential lending.

As employees of Sterling National Bank, The Streisand Team has the ability to not only place loans with Sterling Nationl Bank, but to also identify other lenders that may be able to meet a borrowers needs. This unique ability offers the strength of a bank, with the flexibility of a broker, and more importantly affords The Streisand Team the flexibility to secure the right loan for the borrower.

The Streisand Team was formed in 1992, and quickly evolved to its 5 current team members, including Manager and Vice President Jordana DelVecchio. With over 60 years combined experience, The Streisand Team has consistently ranked in the top 200 mortgage brokers for 19 consecutive years, with a repeat business rate of over 60%. The Streisand Team credits their success to their unique approach to lending, in which they consider themselves to be Mortgage Consultants.

The Streisand Team adopted the concept of Mortgage Consulting after noticing a significant opportunity to function as an advisor to advocate on behalf of their clients’ financing needs. As Mortgage Consultants, The Streisand Team offers services such as post-closing calls, an annual mortgage review program, and monitoring of all clients rates, in an effort to create an environment of mortgage practices that they believe should become industry standards.

“For us, offering residential lending services means taking a complex process and making it simple.”

– Lloyd J. Streisand

The Streisand Team at Sterling National Bank 98 Cuttermill Road Great Neck, NY 11021 516-708-2430 lstreisand@snb.com Lloyd Streisand NMLS #673148 © 2012 The Streisand Team at Sterling National bank

www.streisandteam.com