February 2017

Written by Robert H. Ruth

This is an interesting question. Ultimately the date on your Purchase and Sales agreement is the one that governs when you close, but when you make your offer you can decide the date you’d prefer to close, so it is important to know what the consequences are to closing at different times of the month.

Before we try to figure this out it is important that you understand how mortgage payments differ from rent payments. Rent payments are paid in advance, typically due on the 1st of the month for the current month. So when you rent you are paying the landlord for living in their property for that month, so if it is April 1st, your rent check is paying for the month of April so you can live in the property that month.

Written by Robert H. Ruth

The typical mortgage loan process takes 45-60 days from application to closing, and when you apply, you have to make this important decision. If you lock the rate in, you are guaranteeing that interest rate for the life of your mortgage at that specific point in time.  If you don’t lock in at application, the rate will float, meaning it moves up and down with movements in the market, until you do lock it in.  There can be consequences to either action, some positive, some negative, so let’s look at this issue in more detail.

Interest Rates Fluctuate Frequently

This is because rates for mortgages are influenced by many outside forces, like

• movements in the stock and bond markets,
• statements by the Federal

Written by Robert H. Ruth

When you apply for a loan, you will have to provide documentation to the Loan Officer that proves what your income is and how much money you have in your bank accounts for the down payment, closing costs, and reserve funds left over after closing.  If you apply for the loan at the bank, you can just hand the documentation to the Loan Officer, but increasingly home buyers apply for a loan on line or on the telephone with the Loan Officer so you will be expected to provide the documentation to the Loan Officer electronically.

I cannot emphasize how important it is to have all of your documentation ready when you apply for the loan. Being prepared with the correct documentation will help your loan move through the

Written by Robert H. Ruth

This is a question I deal with on a regular basis working with homebuyers, so I thought you might benefit from an explanation of the key difference between these 2 products.

When I first speak with a new client who is looking to purchase a home, they frequently have been referred to me by a Realtor or a builder. The Realtor doesn’t want to spend time with people who are not able to purchase, or who do not know their price range for a purchase. So my job is to help the buyers understand the home buying process, and then determine the correct price range they should be shopping in and how much mortgage they can afford given their current income and monthly debt load.

• I do this by asking them careful questions