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Thinking about getting mortgage naturally prompts many questions. Millions of other Home Owners/First-Time Buyers have probably asked many of the same questions that are occurring to you now.

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What is credit?

Credit is an agreement to borrow money with the promise that you will pay it back later through scheduled payments. It usually includes interest, which is additional money charged for the privilege and convenience of borrowing.

Do I need good/great credit to get a mortgage?

No, you do not need great credit to get a mortgage, but there are certainly advantages to having a good credit score. Better credit will increase your flexibility as to the type of mortgage you can get, lower the down payment you will need to come up with, and make your mortgage cheaper. At Valley View Home Loans, We offer credit score as low as 500 with 15% down payment. A credit score of 580 will let you make a down payment of as little as 3.5 percent on FHA loans.

Does my spouse's credit score matters?

It depends on whether you want to count both your incomes when applying for a mortgage. If you do, then you have to apply jointly and that means both credit scores come into play. If your spouse has a bad credit history then you could apply on your own, but that means only your income would count towards qualifying. That could result in qualifying at a lower loan level than you would like.

How do I get approved for a mortgage? Here are the key elements:

  • Credit history. See the answer to question 1, above. You don't need great credit, but the higher your score, the better your chances of approval and the better the terms of the loan are likely to be.

  • Income. Lenders will compare your income to the amount of the loan in determining how much you can repay.

  • Job history. Lenders want to see a steady work history – at least two years at the same employer is ideal, but at the minimum, there should be no lengthy gaps in employment during the last two years.

  • Current debts. Essentially, a lender will subtract your existing payment obligations from your income in deciding how much of a loan you can afford.

  • We will walk you through the qualification process.

How long are you pre-approved for?

You can get pre-approved for a mortgage before you are ready to make an offer on a specific house. This essentially involves going through the basic elements of the approval process and getting a commitment from the lender for a specified loan amount and terms. Our pre-approval is good for a limited time only between 45 to 60 days.

What is Conditional Approval?

This means your loan has been reviewed and is likely to be approved as long as everything is as it appears on the application. However, the lender's underwriter – the person who decides whether or not the application meets the lender's standards – may want additional information or documentation on a specific item or two. Conditional approval means that the loan will be approved if you can satisfy that need for additional information or documentation.

How much down payment do I need?

You can get a mortgage with as little as 3 percent down. However, if you can afford a bigger down payment, there are good reasons for putting more money down. First of all, putting more into a down payment means borrowing less money, which will result in you paying less interest. Also, mortgages with a high loan–to–value ratio are likely to have to pay mortgage insurance premiums, and may not qualify for the lowest interest rates. So, putting more money down up front saves you in the long run.

What are closing costs, and how much should I expect to pay?

Closing costs include a variety of fees for things like the inspection and appraisal of the home, as well as fees to the lender for underwriting and originating the loan. You are also likely to have to pay taxes on the loan. Depending on the type of mortgage you have, you may also have to make an upfront payment of a mortgage insurance premium. All told, these closing costs typically run between 1 and 3 percent of the value of the home.

What type of mortgage should I choose?

The two big decisions you will face about what type of mortgage to get are between a fixed or adjustable-rate mortgage, and the length of the loan. A fixed-rate mortgage will mean your monthly payments will stay the same throughout the repayment period. An adjustable-rate mortgage will have payments that vary as market rates change over time. This can work to your advantage if rates fall, but it would work against you if rates rise. As for length, the two most common mortgage durations are 15 years and 30 years. Naturally, spreading repayment out over a longer period results in lower monthly payments, which makes buying a home more affordable

How much of my income should my mortgage be?

Typically in the neighborhood of 30% to 40% of your income.

What is the Annual Percentage Rate of a loan, and how is it different from the interest rate?

The annual percentage rate (APR) is the total annual cost of your mortgage loan, including the interest rate (the fee to borrow money calculated as a percentage of the amount borrowed), loan fees, points and any other charges. APR is required by the Truth-in Lending Act and gives you a tool for comparing the mortgage rates of different loan programs.

When should I lock in my interest rate?

The right time depends on you. Golden rule is to lock in as soon as you have a scenario that works for you.

Should I pay discount points?

You can run the numbers both with and without points to see how the long-term savings compare to the points paid at the beginning. Keep in mind that money today has greater value than the same dollar amount in the future, so if it takes you the bulk of your repayment period just to recoup what you paid initially in points, it probably isn't worth it.

What is refinancing and what are some reasons people choose to refinance?

Refinancing is the process of paying off one mortgage loan with the money from a new loan, using the same property as security. The decision to refinance will depend upon your personal objectives. Such as "To reduce monthly mortgage payments or to Cash out a portion of the equity in your home or to obtain a stable interest rate or to consolidate debt".

How does a cash out refinance work?

Unless you currently have an interest-only mortgage, as you continue to make monthly payments on your mortgage, you're building equity in your home. You can cash out by taking out a new, larger mortgage against that equity. Many people use the money obtained from a cash-out for, among other things, home improvements, college tuition, major life events or to pay off credit card debt.

What documentation will I need to complete the mortgage process?

During the application process, expect to provide proof of income, such as pay stubs and tax returns. You will also have to provide information on any bank or investment accounts you have. At closing, you will need a cashier's check or proof of a wire transfer to make your down payment and pay any closing costs. You will also need to provide legal ID, such as a driver's license.

What is Impound/Escrow Account?

It's account where money is held until it is time to use it on your behalf to make specific payments related to your house, such as property taxes and insurance premiums. Since Valley View Home Loans has an interest in making sure you keep up with those payments, we control the escrow account that you fund and use the money to make the necessary payments when they come due.

How long does it take to close a mortgage?

Currently at Valley View Home Loans, we are taking 25-30 days to close on Purchase and 21-25 days on Refinance.

How do I calculate my prospect mortgage payment?

The best way is to use our mortgage calculator.

Will my monthly payments change over time?

This depends on the type of mortgage you get. Most mortgages are conventional, fixed-rate loans that have equal monthly payments over the life of the loan. However, adjustable-rate mortgages have payments that are subject to vary if interest rates change. Also, some loans are structured to minimize initial payments in exchange for larger payments later on.

Can I prepay my mortgage?

Typically yes. However, we do offer mortgages with prepayment penalties.
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We are an Equal Housing Lender. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age (provided you have the capacity to enter into a binding contract), because all or part of your income may be derived from any public assistance program; or because you have exercised your rights under the Consumer Credit Protection Act. 

Program rates and parameters are subject to change without notice, and may differ by geographic location. Turn times are estimates and not warranted or guaranteed. Restrictions may apply. This material is intended for use by industry professionals only, and not for distribution to consumers. This is neither a solicitation of an offer nor a commitment to lend.

The interest rate you pay on a mortgage is the single biggest factor in your monthly payments. The higher the mortgage rate, the more you will pay over the life of the home loan. It is thus very important for you to compare mortgage rates when you shop for a loan. At Valley View Home Loans our experienced Loan Advisors are ready to help. Call us or apply online and we will help with the rest. © 2017 Bay-Valley Mortgage Group, Inc. DBA Valley View Home Loans and Pacific Bay Lending Group. All Rights Reserved. NMLS # 192103. NMLS CONSUMER ACCESS . Licensed by the California Bureau of Real Estate.

 

TEXAS COMPLAINTS & REIMBURSEMENTS

Consumers wishing to file a complaint against a mortgage banker or a licensed mortgage banker residential mortgage loan originator should complete and send a complaint form to the Texas department of savings and mortgage lending,  2601 North Lamar, suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at  www.sml.texas.gov. A toll-free consumer hotline is available at  1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at  www.sml.texas.gov .

7390 Lincoln Way. Garden Grove, CA 92841

714-367-5125   |     [email protected]

We are an Equal Housing Lender. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age (provided you have the capacity to enter into a binding contract), because all or part of your income may be derived from any public assistance program; or because you have exercised your rights under the Consumer Credit Protection Act. 

Program rates and parameters are subject to change without notice, and may differ by geographic location. Turn times are estimates and not warranted or guaranteed. Restrictions may apply. This material is intended for use by industry professionals only, and not for distribution to consumers. This is neither a solicitation of an offer nor a commitment to lend.

The interest rate you pay on a mortgage is the single biggest factor in your monthly payments. The higher the mortgage rate, the more you will pay over the life of the home loan. It is thus very important for you to compare mortgage rates when you shop for a loan. At Valley View Home Loans our experienced Loan Advisors are ready to help. Call us or apply online and we will help with the rest. © 2017 Bay-Valley Mortgage Group, Inc. DBA Valley View Home Loans and Pacific Bay Lending Group. All Rights Reserved. NMLS # 192103. NMLS CONSUMER ACCESS . Licensed by the California Bureau of Real Estate.

 

TEXAS COMPLAINTS & REIMBURSEMENTS

Consumers wishing to file a complaint against a mortgage banker or a licensed mortgage banker residential mortgage loan originator should complete and send a complaint form to the Texas department of savings and mortgage lending,  2601 North Lamar, suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at  www.sml.texas.gov. A toll-free consumer hotline is available at  1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed mortgage banker residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at  www.sml.texas.gov .