Frequently Asked Questions About Mortgages

This is a comprehensive mortgage FAQ by Austin mortgage lender Joel Richardson. Please feel free to use this when preparing to purchase a home. In this complete mortgage FAQ (frequently asked questions), you will find information for the general home buying process.

Q: What is the difference between a mortgage banker and a mortgage broker?

A: Both mortgage brokers and bankers will originate your loan and shop various lenders for a program and rate. The difference (and devil) is in the details: A broker must deliver the loan package to the lender to underwrite and fund, therefore losing control of your loan. A mortgage banker will shop all the lenders, but the file will be underwritten, closed, and funded in the mortgage banker’s name and eventually shipped to the end investor.

You can also go to a retail bank for a loan, but they are locked into their rates only.

Q: What is the difference between the interest rate and the annual percentage rate (APR)?

A: The interest rate is the contractual rate a borrower agrees to pay for your mortgage loan. This lender uses the rate to calculate the interest portion of your monthly mortgage payment. Annual percentage rate (APR) includes your interest rate and factors in the prepaid finance charges to give you an average yearly rate. APR can be an excellent tool to use when you’re comparison shopping for rates.

Q: Do I need to be prequalified for a mortgage before I begin my search for a home?

A: A borrower, prequalified before looking for a house, will experience a smoother home-buying process. The process is simple. To arrange to be prequalified for your mortgage, take the following steps:

  1. Gather your personal financial information, such as bank statements, W-2 forms, and paycheck stubs.
  2. Meet with me to pull your credit report and evaluate your financial documents. You can now discuss the best home mortgage financing options to help you achieve your financial goals.
  3. Based on the evaluation of your financial documents and credit, I will write a prequalification letter for you to inform your Realtor and the seller of the property that you are a qualified buyer. Sellers and realtors have greater confidence and take a buyer more seriously with prequalification.

Q: What documents will I need when I apply for a mortgage?

Usually, you must provide documents verifying your employment, income, and assets. Though some mortgage loan programs have limited requirements in terms of documentation for specific home buyers, a typical mortgage loan program requires the following documents:

  • A copy of your Social Security card (applies to anyone applying for the loan with you)
  • Pay stubs for the last two months
  • W-2 forms for the past two years
  • Bank statements for the past two or three months
  • One to two years’ federal tax returns
  • A signed contract of sale (if you have already chosen your new home)
  • Information on current debt, including car loans, student loans, and credit cards

It is best to consult with us as you gather your documents.

CONTACT AUSTIN MORTGAGE PROFESSIONAL JOEL RICHARDSON

What additional questions do you have? For mortgage rates or credit scores, you can rely on Joel Richardson, a Senior VP for Central Texas Mortgages for VeraBank. With 30 years of financial experience and the desire to help provide you with a hassle-free tailored solution to help you finance your new home or investment property. Call (512) 203-8244 today or complete the online form to learn more.

© Joel Richardson. All Rights Reserved. | This website is operated by Joel Richardson, who is currently an employee of VeraBank, N.A. (“VeraBank”) The views expressed on this website are not necessarily those of VeraBank. This website also has its own privacy policy, which may differ from VeraBank’s privacy policy. VeraBank makes no express or implied warranty regarding the information or data on this website, and hereby expressly disclaims all legal liability and responsibility to persons or entities who use or access this site and its content, based on their reliance on any information or data that is available through this website. Joel Richardson has sole responsibility for the information and data on this website. Deposit and loan products described on this website are offered through VeraBank, Member FDIC. To visit VeraBank’s website, here.