How do I qualify for a real estate home loan?

A loan is like a chair. A chair has 4 legs and your loan has 4 legs:

1. Credit Score
2. Debt-to-income ratio
3. Loan-to-Value
4. Documentation

Contact The Sarah Pichardo Team to see how your interest rate is affected by the type of program you may qualify for, such as FHA, VHDA FHA Plus, conventional financing, and VA loans.

How do I apply for a mortgage loan?

Here are the ways you can apply for a mortgage loan with The Sarah Pichardo Team:

• Phone — Call our office at (571) 266-6490 to start the loan application process via phone.
• In-person — Call us to set up a time to stop by our office and fill out our 15 minute application.
• E-mail — Send to spichardo@potomacmortgagegroup.com and we’ll reply with a loan application.
• Online — Click here to apply online. After we receive your application, we will give you a call.

What are the items needed for a loan application?

Here is a list of all of the items you will need when submitting a loan application to The Sarah Pichardo Team.

• One month most recent paystubs with year to date information.
• 2 years federal tax returns with all schedules and W2s.
• Copies of most recent two months asset account statements on all accounts to include checking, savings, mutual funds, stocks, bonds, 401K and/or IRA accounts. Please provide all pages for each statement.
• Contact information for HR department to verify employment.
• Name, address, and phone number of landlord/management company for past 2 years if renting.
• Copy of Driver's License
• Divorce decree, separation agreement, and property settlement agreement, if applicable.
• Check made payable to "Potomac Mortgage Group, Inc. (PMG)" for the appraisal, typically $425 for conventional loan, and $450 for FHA/VA loans. Can also be paid by credit card.
• Copy of ratified Sales Contract when available for purchases.

Additional information required for self employed or commissioned borrowers:

• Complete federal individual tax returns with all schedules, w-2’s and 1099s.  Please also provide corporate, S-corp, or partnership returns, if applicable.  Please provide information for most current two tax years.
• Year-to-Date Profit and Loss Statement and Balance Sheet dated to within the most recent 90-day period.
• Copy of current Business License.

Additional information required if applying for a VA loan.

• Copy of DD 214 or Statement of Service from your commanding officer (stating rank, position and that you are in good standing)

Additional Items for Refinance

• Current Note
• Deed of Trust
• Mortgage Statement

How will I know how much I can qualify for?

The Sarah Pichardo Team can work with you to get you pre-approved BEFORE you look for a home. Based upon information you present to us on the loan application and a credit report, we will determine the approximate amount of money that you are qualified to borrow. This will allow you to make an offer on a home with confidence.

What are income and debt ratios?

The front or housing ratio is your total monthly housing expense divided by your gross monthly income (before taxes). The back or total debt-to-income ratio is your total monthly housing expense PLUS any recurring debts (i.e. monthly credit card minimum payment, car payments, or other loan payments) divided by your income. Standard underwriting suggests a maximum guideline of 28% on the Housing ratio and 36% on the total debt-to-income Ratio.

Can I qualify for a VA Loan?

VA loans are guaranteed by the Veterans Administration. They are for individuals that have served our country in the military, and may be eligible for up to 100% financing. DD-214 are needed for non-active and a letter of good standing for active military.

What does "loan to value" mean?

Loan to value (LTV) is the loan amount divided by the lesser of the sales price or appraised value. For example, if you are paying 15% of the total cost of the home as a down payment, you would only be borrowing 85% of the total sales price from the lender. Therefore your LTV would be 85%.

What is the Annual Percentage Rate on my Truth in Lending Document?

The Annual Percentage Rate (APR) is the cost of your credit expressed as an annual interest rate. Points and other prepaid finance charges are factored into the APR to show the true yield on the loan, which is why the APR is often higher than your note rate. The APR can be compared to the APR on other loan programs to give you a consistent means of comparing rates and programs.

What is a discount point?

A discount point is paid to the lender to permanently buy down or lower interest. Discount points are prepaid interest and may be tax deductible. One point is equal to one percent of your loan amount.

What is prepaid interest?

This is the interim interest that accrues on the mortgage loan from the date of the loan closing to the beginning of the period covered by the first monthly payment. For example, if your closing date is scheduled for June 15, the first mortgage payment is due August 1st. The lender will calculate a per-day interest amount that is collected at the time of closing. This amount covers the interest accrued from June 15 to July 1.

What is an Adjustable-Rate Mortgage (ARM)?

An adjustable-rate mortgage is considerably different from a fixed-rate mortgage. ARMs have only been around since the early 1980s. They were created to provide affordable mortgage financing in a changing economic environment.

An ARM is a mortgage where the interest rate changes at preset intervals, according to rising and falling interest rates and the economy in general. In most cases, the initial interest rate of an ARM is lower than a fixed rate mortgage. However, the interest rate on an ARM is based on a specific index (such as U.S. Treasury Securities or LIBOR). This index reflects the level of interest rates and allows the lender to match the income from your ARM payment against their costs. It is often selected because it is a reliable, familiar financial indicator. Monthly payments are adjusted up or down in relation to the index.

Most ARMs have caps-limits the lender puts on the amount that the interest rate or payment may change at each adjustment, as well as during the life of the mortgage. With an ARM, you typically have the benefit of lower initial rates for the initial fixed period of the loan. The ARM can also go up so please talk to The Sarah Pichardo Team to understand the risks. Plus, if interest rates drop and you want to take advantage of a lower rate, you may not have to refinance as you would with a fixed rate mortgage. An ARM may be especially advantageous if you plan to move after a short period of time. The ARM can also go up so please talk to The Sarah Pichardo Team to understand the risks.

What is a FICO score?

A FICO score is a credit score developed by Fair, Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair, Isaac & Co. began its pioneering work with credit scoring in the late 1950s and, since then, scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrower's credit history into a single number and indicate the likelihood that a borrower will repay their debt.

How does the loan process work?

The process for obtaining a loan to purchase a property has several steps, including: applying for your loan, getting approved, finding your house, and closing. After submitting the relevant documentation with your application, The Sarah Pichardo Team will verify the information on your application with the supporting documents. In some cases we will ask for additional documentation. We do this to determine the income we can use for qualification. This ensures we do not put someone into a home they can not afford, which protects both the borrower as well as the bank.

The following step are the main components of the New Loan Process:

• Loan Application Submitted
• Supporting Documents Submitted to Sarah / The Sarah Pichardo Team
• Verify Complete Documents Received
• Loan Program Selected
• Good Faith Estimate/Loan Scenario provided
• For purchases, a pre-approval letter is created
• Loan Approval Letter Received
• Search For Property
• Property To Purchase Located
• Write Purchase Contract
• Contract Ratified
• Interest Rate Locked In
• Loan paperwork prepared, reviewed, signed and returned
• Home Owner Insurance Obtained
• Property Appraisal Ordered
• The Sarah Pichardo Team orders the property appraisal, title work, and verifies employment, deposits, tax returns, social security, etc. on the borrowers
• Loan sent to underwriting for final review and approval
• Approved loan is sent to closing department
• Closing instructions are sent to the title company so they can generate the HUD-1 and the final loan documents for closing
• Closing takes place usually at the title company location

Is applying online for a loan secure?

Applying for a loan online using The Sarah Pichardo Team's web portal is completely safe and secure. All information is processed through Potomac Mortgage Group, Inc. (PMG) web site which has multiple layers of security to ensure maximum protection for all of your personal information.

Testimonial
"Your work throughout this journey has been phenomenal! We knew from talking with you that you would be there for us—you answered our questions and you were able to turn around a loan in a very short time. You were supportive of us and always wanted us to think about what was best for us. That selflessness is touching. Thank you for being there for us. I couldn't imagine getting a mortgage through anyone else."

Jackie and Teresa A.