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When shopping for a loan, there are a few things to consider. Most importantly, how long will you own the home. If purchasing for a short period of time or for investment purposes, the owner might consider an adjustable rate mortgage (ARM) enjoying a lower interest rate. ARM rates are fixed for a specified period, then adjusts at a benchmark rate (prime, 1 year treasury, etc.) plus margin. Other options are interest only and of course fixed rate.
Also, there are many different methods concerning loan underwriting. Lenders offer products using stated income, no income, no documentation and of course full documentation. For the ease of the no-doc programs, usually the offset are higher rates. The loan process is very simple. The lender requires a completed loan application and government disclosures. Depending on loan underwriting, no |
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| documentation to two years worth of tax returns and statements to support income might be required. After loan approval, insurances will have to be purchased prior to closing (title, hazard, flood and windstorm insurances) if applicable. |
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