The BMC Keystone Blog - Mortgage Broker in Pennsylvania

Q: What happens during a free mortgage consultation?

BMC Keystone offers a complimentary mortgage consultation to help you understand your options and prepare with confidence. We can meet in our Glenside office or make it a phone call. During your consultation, we’ll ask about your plans to get a sense of what you need. Then we'll talk about: Your credit scores and how they affect your interest rate How much home you can comfortably afford Loan programs and first-time buyer options available in Pennsylvania Simple ways to improve your credit profile How to get a letter of pre-qualification or pre-approval Schedule your free consultation using our online form or call our Glenside office at (215) 885-4828.

Q: How do I get pre-approved for a mortgage in Pennsylvania?

First let's clarify a few terms that borrowers often use interchangeably although they are different. A mortgage pre-qualification is designed to give you an idea of how much money you can borrow or how much a loan will cost you. It is not a guarantee and there is no commitment from the lender to loan the money. A pre-qualification simply means that upon reviewing the financial information provided, the lender believes you will qualify for a loan. You typically do not have to fill out a full mortgage application (1003) or undergo a hard credit check in order to obtain a pre-qualification. A mortgage pre-approval, or letter of pre-approval, goes further. It is a lender's conditional commitment to lend you a specified amount of money. A pre-approval letter is a powerful tool to have on hand for house hunting, allowing you to shop with confidence and show sellers that you are a serious buyer. Your provider will likely have you fill out a mortgage application (1003), or fill in sections of the application, in order to obtain a pre-approval. To obtain either a pre-qualification or a pre-approval, contact a lender or mortgage broker and explain your needs and where you are in the process. They'll ask for some financial information, such as income, assets, debts, and credit history along with how much money you plan to borrow.

Q: How much do I need for a down payment to buy a house?

The amount of money required for a down payment will depend on the type of loan among other factors. Here are some guidelines: Most buyers need minimum payment between 3–5% down for a conventional loan. But a down payment of less than 20% requires the buyer to pay an additional monthly amount for private mortgage insurance (PMI) which can be cancelled later once 20% equity is reached. FHA loans require as little as 3.5% down but MIP, a monthly mortgage insurance premium, will apply for the life of the loan or until refinanced into a conventional loan. VA or USDA loans may allow 0% down and do not require any monthly mortgage insurance.

Q: How long does it take to close on a home loan?

Typical home loans for a purchase transaction can close in as little as 30 days. However, it may be more realistic to plan for 60 days to deal with any issues that arise during the appraisal and title search. Refinance loans often close a bit faster.

Q: When does it make sense to refinance?

Calculating if it makes sense to refinance will depend on your original rate, the new rate, and your closing costs. Timing also depends on your goals. If you want to lower your monthly payments, when rates are 0.5–1% point lower than your existing rate, it's time to do the math. If you want to shorten your loan term, or if you’ve built enough equity to remove mortgage insurance, it's time to do the math. Regardless of who your current lender is, BMC Keystone can help. We can look at the numbers to determine how much money you would save overall and run down a list of any fees. Ideally, you want to save more than you spend. We would be happy to review your current loan, today's rates, and give you a better picture of how a refinance could benefit you and how much it will cost.

Q: How much does it cost to refinance in Pennsylvania?

A refinance is not a do over, it's more of a start over. You will satisfy the original loan and begin a new one, whether you go with the same lender or not. Your new loan will have closing costs, which will depend on your lender and the type of loan, but broadly speaking, you can expect to incur the following closing costs: Loan origination fee Appraisal fee, if required Lender's title insurance policy Mortgage Recording fees Closing costs typically range from 2–5% of the borrowed amount.

Q: Do I have to use the same lender when refinancing?

No. Refinancing is the result of satisfying the original loan and starting a new loan. Whether you return to your current lender or work with a new one, the process is the same. When you use a mortgage broker like BMC Keystone, you get access to multiple lenders and wholesale rates. We'll shop the market to find the best deal.

Q: Are there first-time homebuyer programs in Pennsylvania?

Yes there are a number of programs that can be beneficial to first time buyers. The Homebuyer Advantage Program If you're a Pennsylvania home buyer, whether this is your first home purchase or not, the Homebuyer Advantage Program is a great loan to consider. It's designed to make owning a home more accessible and more affordable, yet many buyers simply aren't aware of this loan. At BMC/Keystone, we have experience with this program. Low Down Payment Loans with Below Market Rates If you're a first time home buyer, a veteran, or if you haven't owned a home in over 3 years, this program can make buying a home considerably more affordable with minimal money down, a below market interest rate, and/or some closing cost assistance. For many Pennsylvania buyers, programs like these make the dream of home ownership a reality. BMC/Keystone has experience with this program. BorrowSmart Downpayment Assistance Loan in Pennsylvania The Borrower Smart program is a Freddie Mac mortgage program designed to make homeownership more accessible to first time buyers. Because coming up with a down payment is one of the biggest obstacles first-time buyers face, this program helps by offsetting some of their out-of-pocket closing costs with a lender credit. BMC Keystone has a lot of experience with different loan types and we know how to customize a loan to suit your financial position, from down payment assistance, structuring a seller assist into the offer, and exploring your eligibility for government grants or forgivable loans. Please schedule a free consultation to discuss.

Q: How much are closing costs on a mortgage?

When you purchase a home, closing costs cover fees, insurances, and taxes. These include: Lender fees Appraisal fee Home owner's insurance Title search and related fees Settlement fee Title insurance premium Transfer Tax Property tax and school tax Reimbursement of fees pre-paid by seller (taxes, utilities) County recording fees Closing costs to total between 2–6% of the purchase price.

Q: Can I use money from family towards a down payment?

In this context, money from friends and family are referred to as gift funds , and as long as the funds are disclosed to the lender by proper documentation, it is generally allowable on both Conventional and FHA loans. There are no limits to the amount of gift funds that you can receive towards the purchase of your home. Gift funds can be used towards closing costs, your down payment, or applied to buy down on your mortgage interest rate to make monthly payments more affordable.

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