Maryland Home Loan FAQs
Alliance Mortgage Funding has helped Marylanders get home loans - and homes - since 1993. Here are the common questions they’ve asked us over the years - questions you may want answers to on your way to your new home in Maryland:
How do I know if I’m ready to take out a home loan?
The only way to truly know if you are ready to take a home loan is to consult with an experienced mortgage professional who can assess your financial situation, your wants, needs and current and future financial goals. At Alliance Mortgage Funding, Inc. there is NEVER a charge for a Mortgage Planning Session, so please give us a call today at 410-683-1500 to schedule a phone appointment.
Which home loan program should I get?
This depends on many different factors: How long do you plan on owning the home? Credit scores, the amount of cash you have to work with, and your current debt-to-income ratios are just a few factors that dictate which mortgage program best suits your needs.
When should I refinance?
There are no written rules to determine when a refinance makes sense. Everyone’s situation is different and unique. Most homeowners refinance to drop the interest rate, to decrease the loan term or to pull cash out of their home to consolidate debt or pay for home improvements. The only way to truly determine if a refinance makes sense is to call an experienced mortgage professional to perform a detailed refinance analysis. At Alliance Mortgage Funding, Inc. there is NEVER a charge for this refinance analysis, so please give us a call to get yours scheduled today.
How much I can safely borrow?
Mortgage guidelines state that your mortgage payment should be no higher than 29% of your total gross monthly income, and total debt no more than 41% of your total gross monthly income. Keep in mind that this is just a guideline and each situation is unique. The only way to determine how much you can safely borrower is to contact an experienced mortgage professional.
How can I ensure the home mortgage process runs as smoothly as possible?
The #1 key to a smooth mortgage process is to choose a reputable lender who has a long history of positive customer feedback. Alliance Mortgage Funding, Inc. prides itself on a near perfect satisfaction score from our many past customers. Please “Google” Alliance Mortgage Funding Reviews to see for yourself.
Do I need perfect credit for a home loan?
The simple answer is “no”. In fact, it is possible to qualify for a mortgage with a Credit Score as low as 580. If you think your credit is weak, give us a call for a complimentary credit report and mortgage consultation. We will pull your credit and let you know if you qualify. If you do not immediately qualify, we will give you the guidance needed to get you on the path to homeownership.
What should I know about down payments?
A very common “myth” is that 20% Down Payment is needed to qualify for a mortgage. This could not be further from the truth. While a 20% Down Payment gives you the most advantageous financing terms, it is possible to qualify for a mortgage with NO Down Payment. Please give us a call for your complimentary mortgage consultation to determine how much Down Payment you will need to purchase a home.
Can I get a Maryland home mortgage if I’m self-employed?
Yes, as long as you have been Self-Employed for at least 2 years and have 2 years of Tax Returns to verify your income.
How do I calculate closing costs?
Don’t try to calculate closing costs on your own, and you can’t rely on-line closing cost calculators. Closing Costs are unique to each transaction and specific to each state/county. If you would like to know how much closing costs would be for a specific scenario just give us a call and we will be happy to work up a complimentary Closing Cost Worksheet for you.
Can closing costs be included in my loan?
On a refinance they can be included in the loan, but not when purchasing a home. However, when purchasing a home you can ask the Seller to pay some or all of your Closing Costs, in return for a strong offer. Doing this essentially gives you the same result as including them in your loan amount.
How can I raise my credit score?
There are several things you can do to raise your credit:
- The most obvious thing you can do is to pay your bills on-time.
- Bring any past-due payments up-to-date.
- Maintain enough trade-lines to establish a strong credit history. Usually 2 credit cards and one installment loan.
- Do not allow the balances on your credit cards to exceed 30% of the total credit limit.
- Do not allow your credit report to be pulled, unless necessary.
What’s the difference between Pre-Qualification and Pre-Approval?
A Pre-Qualification and Pre-Approval are often used terms that cause a lot of confusion among home buyers. A Pre-Qualification is based on the opinion of a mortgage loan officer. They are often issued without a running a full mortgage credit report or verifying income or assets. A Pre-Approval is much stronger. Before you begin shopping for a home, you should get a full Pre-Approval. It will make your home buying experience easier and increase the odds your offer will be accepted,
Becoming fully approved means you can...
- Make an offer on a home with more confidence.
- Save time by looking for homes within your budget.
- Have a huge advantage over other offers. Sellers take Fully Approved buyers more seriously, especially when they have multiple offers to consider. Sellers will often accept a lower offer from an Approved buyer, over a higher offer from an unapproved buyer or a buyer with a Pre-Qualification letter. To a seller, the assurance of a timely closing is more important than a higher from an unapproved buyer, or an offer from a buyer approved by an out of state lender.
- Close much sooner. This may not be important to you, but could be very important to the seller, thus, making your offer more appealing.
Since you need to get approved at some point, it makes sense to do it early in the process. It can make the difference between getting your offer accepted or rejected - and save you $$$.
What can I do if I’m upside-down on my mortgage?
If possible, we suggest remaining in your home until the market appreciates to a point where you are no longer upside-down. If it is not possible to remain in your home you can always rent out your home until you are no longer upside-down. If all else fails you can contact your lender and try to Short Sale your home. This means you sell it for less than the amount of the mortgage, and the lender forgives the deficit amount. When considering a Short Sale as an option, it is important to understand that a Short Sale will damage your credit and in most cases you will not qualify for another mortgage for at least 3 years.
Can I change mortgage lenders?
Yes, you can change lenders any time you feel that your mortgage needs are not being served or if you are being overcharged.
Why should I choose a home loan with a large down payment?
Larger down payments allow you a lower monthly payment and most advantageous terms on the mortgage. However, large down payments should only be made if the down payment does not exhaust the majority of the funds that you have available. It is always best to leave plenty of “cushion” in the bank after closing for incidentals or emergencies.
Why is Alliance Mortgage Funding the right choice for my home loan?
- Our team has a combined 61 years of experience in the mortgage industry.
- Most of our clients come from recommendations and referrals. That’s business we’ve earned by doing a great job every time.
- We’ve earned over a hundred five-star reviews. You can read them on our site, but you’ll find plenty of them on third-party sites (like Angie’s List) as well.
- Many of our clients come back to us again and again, because they know they can trust us.
- We take the time to work with you, educate you, and make the mortgage process go as smoothly as humanly possible.
- In 2012, Alliance Mortgage Funding was voted the “Best Mortgage Company in Maryland.”
- Our “No Surprises Guarantee” offers you full protection. It means you’ll never have to worry about hidden fees or last-minute increases in points.
- We’re active members of trusted organizations like the Maryland Association of Mortgage Professionals, the National Association of Mortgage Professionals, recipient of the Lending Integrity Award, and each member of my team is a USA Cares, Certified Military Housing Specialist.
Our team is dedicated to earning your trust and to delivering the smooth home-buying experience you’ve been looking forward to. Call us today at 410-683-1500 or contact us online to experience the Alliance Mortgage Funding difference.