Home financing information and FAQ for houses in NC & SC | Mungo Homes

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New Home Financing FAQ

What is the benefit of using one of your lenders?

Our lenders each have a team of processors and underwriters specifically for Mungo Homes’ buyers, who is available for pre-approval and to answer questions seven days a week. A mortgage consultant will do a free, confidential review of your financial situation and advise you on the home loan that best suits your needs. There are a wide variety of products – different types of loans – available specifically for Mungo buyers. Our lenders are familiar with our sales team and closing coordinators, offer competitive rates, and may provide for the elimination or deferral of closing costs, which they can discuss with you on an individual basis.

In addition, we have no control over the process or the closing date if you use an outside lender.

What documents do I need to apply for a new home loan?

Items needed for a loan application may include W-2s from the last two years, current pay stubs with year to date earnings, statements for checking, savings, other bank or investment accounts, proof of monthly rental or mortgage payments, name of current or past employers. Two years of employment history is required.

What is a credit score?

Along with a credit report, lenders will often request a credit score (FICO) to help determine whether or not you are eligible for a loan. The score is a credit overview and is weighed by the following:

  • 35% payment history
  • 30% amounts owed
  • 15% length of credit history
  • 10% new credit
  • 10% types of credit used

A median credit score (FICO) ranges from 690 to 740.

Can you explain the mortgage process?

Loan Approval - Although some loans can be approved within 24 hours, the process typically takes 10-30 days. You will be notified by your lender who will also notify your sales agent so there will be no delay in the start of your new home.

It is not unusual in new construction to provide updated information prior to closing. Any changes in your financial situation could cause a delay in closing your loan.

Locking in Your Interest Rate - There are several options available when it comes time to lock-in to an interest rate.

The majority of our loan products are in the conforming loan category, meeting guidelines set forth by FNMA, FHLMC, FHA and VA. You can lock-in to a rate on one of these programs within 60 days of closing without a fee. But you must lock-in at least four business days prior to closing to avoid delay.

For a fee, there are opportunities for extended lock-ins of up to 90 and 120 days. There is typically a 1/2% fee for 90-day lock and a 1% fee for a 120-day lock.

You may elect to use an extended rate cap program, which puts a ceiling of .5% over the current rate for up to 180 days. Under this program, you cannot lock-in your rate until you are within 30 days of closing.

The lock-in options on non-conforming loans vary and information is available from a loan officer.

When it’s time to lock-in your interest rate, confirm that the completion date of your new home is within the lock-in period you have selected. Even though an expected closing date may be confirmed, the seller is entitled per contract to extend the closing date and bears no responsibility for interest rates or the expiration of loan locks.

It is the borrower’s responsibility to lock in the interest rate.

Closing Your Loan - The loan closing for your new home will take place at the selected attorney’s office after the home is complete and all inspections have been performed. One week prior to closing, you must provide proof that homeowners insurance is in place.

The closing attorney will prepare the closing package per your lender’s instructions and 24 hours prior to closing will provide the borrower with the exact amount of money needed for closing.

Is there anything special I should do with my finances prior to closing?

  • Do not increase your debt by making any major purchases such as a car, furniture, or electronics.
  • Do not move funds between accounts.
  • Save all documentation on any deposits into your accounts.
  • Keep balances on all revolving accounts as low as possible.
  • Be sure payments on all current accounts are paid on time!

Can you define basic mortgage terminology?

Adjustable Rate Mortgage (ARM) – a mortgage whose interest rate changes over time based on index.

Annual Percentage Rate (APR) – the total yearly cost of a mortgage expressed as a percentage. It includes interest and other finance charges such as points, origination fees and mortgage insurance.

Debt-to-Income Ratio – the ratio to qualify you for a mortgage. Compares your total monthly housing expense and other debt (the amount you pay out) with your total monthly gross income (the amount you earn).

Deed – the legal document conveying title to a property.

Down Payment – the difference between the sales price of the home and the mortgage amount. Buyer pays with cash and does not finance with a mortgage.

Earnest Money – a deposit given to the seller to show that a prospective buyer is serious about purchasing the house.

FHA Loan – a mortgage that is insured by the Federal Housing Administration (FHA).

Fixed-Rate Mortgage – a mortgage in which the interest rate does not change during the entire term of the loan.

Homeowner’s Insurance – Insurance that protects your home and possessions from theft and damage.

Interest – a fee you pay for borrowing money.

PITI – "Principal-Interest-Taxes-Insurance", the four elements of your monthly mortgage payment.

Prequalification – the process of pre-determining how much money a prospective buyer might be eligible to borrow. Prequalifying for a loan does not guarantee approval.

Principal – your loan amount, not including interest; the amount borrowed or remaining unpaid. Also, the part of the monthly payment that reduces the outstanding balance of a mortgage.

Purchase/Sales Agreement – a contract between the buyer and seller that defines the terms and conditions of the home purchase.

Title – written evidence that proves you are the owner of your property.

Underwriting – the analysis of your overall credit and property value and the determination of a mortgage rate and term.

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