Buying a Home

Getting Started
Your Credit
Income and Debt
Rates, Points & APR
Loan Types
Lock, Cap or Float?
Pre-Qualified vs. Pre-Approved
Pre-Closing
Closing

Getting Started

Should I buy a house?
Need help in determining if buying a house is a better choice over renting? Use these calculators to explore various costs and the long-term implications associated with each.

• Should I buy or rent?
• What home can I afford?
• How much would I qualify for?
• Contact an Infinity Home Mortgage Company, Inc. Advisor or call (856) 470-1101

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Your Credit

Check your credit report. Infinity Home Mortgage Company, Inc. offers a free credit check so you can check your credit report for accuracy. Be sure any mistake, such as payment that was listed as late or missed, is corrected. Changes to your credit report can take anywhere from 30 days to 3 months, so it’s best to check your credit report when you begin your search for a new home. Note, however, that you do not want to have your credit report checked too often; doing so may suggest problems with your credit.

Pay your bills on time. Recent late or missed payments will likely lower your credit score more so than late a payment that happened years ago. Be sure to pay bills by their due date, not during the grace period. In credit scoring, making a payment during the grace period counts as a late payment.

Reduce your credit card balances. How much you owe on your credit cards compared to your total credit limit, is one of the heavily weighted factors in your credit score. A good guideline to follow is to keep your balances around 25% of your credit card limit.

Pay off debt rather than transferring balances. It’s best to pay off as much debt as you can, rather than transferring balances of several credit cards to one or two cards and eliminating those accounts. Remember, a key factor in your credit reporting is the ratio of your credit card balance to the card limit. Combining balances may create a higher debt to limit ratio.

Own two to four credit cards. Guidelines suggest that fewer credit cards, or more credit cards, may have a negative effect on your credit rating. Also, be sure to have a checking and savings account. If you have neither, points will be deducted from your score.

Contact creditors if there is a problem. Many creditors are willing to work with their customers to develop an affordable payment solution in difficult financial situations. It’s best to try to correct any outstanding issues prior to, or early in, the application process.

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Income and Debt

In addition to your credit score, two other factors in the mortgage equation are your income and outstanding debt. To qualify you for a loan and determine how much you can borrow, lenders compare your income to your outstanding debt and monthly expenses. Generally speaking, your monthly debt and housing expenses should not exceed 36% of your gross monthly income. When purchasing a home, try to reduce your existing debt as much as possible and avoid incurring any new debt in the months preceding the purchase.

Even if your monthly debts and expenses exceed 36% of your income, that doesn't have to mean you can't get a mortgage. Infinity Home Mortgage Company, Inc. offers financing programs help make homeownership affordable for people from a variety of financial backgrounds. To learn more, contact an Infinity Home Mortgage Company, Inc. Advisor or call us at (856) 470-1101 today.

• How much would I qualify for?
• What home can I afford?
• Which loan should I choose?

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Rates, Points & APR

Interest Rates
The interest rate of your loan affects your monthly payment; the higher the interest rate, the higher your monthly payment, the lower the interest rate, the lower your monthly payment. Use this calculator to compare two or three mortgage packages.

Points

A point, also known as a loan’s “origination fee”, is equal to 1% of loan amount. For example, a loan equal to $100,000, one point would equal $1,000; two points would equal $2,000 and so on. Points are paid to the lender at the time of closing and are used as a way to save money on interest over the life of a loan and, in turn, lower your monthly payments.

APR
The APR expresses the annual cost of a loan as a percentage, factoring in its rate, points and other charges over the life of the loan.

The following costs are generally included in the APR:

• Points - both discount points and origination points
• Pre-paid interest - the interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations, however others may use any number between 1 and 30.
• Loan-processing fee
• Underwriting fee
• Document-preparation fee
• Private mortgage-insurance

The following costs are sometimes included in the APR:

• Loan-application fee
• Credit life insurance (insurance that pays off the mortgage in the event of a borrowers death)

The Truth-in-Lending Act requires that all advertisements for home loan credit terms include the APR. The APR is intended to enable you to compare terms of loan products from different lenders. Note however, that not all lenders calculate APR the same way. The best way to make an accurate comparison, is to compare loans with the same terms, interest rates and other fees.

• Contact an Infinity Home Mortgage Company, Inc. Advisor or call (856) 470-1101

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 Choosing a Loan

Loan Types There are two general categories for home loans: fixed-rate mortgages and adjustable-rate mortgages (ARMs).

Fixed-Rate Mortgages
Fixed-rate mortgages offer interest rates that stay the same throughout the life of the loan so you can have predictable monthly payments. You won’t have to worry about rising interest rates and can take comfort in knowing your loan payments will never increase. Fixed-rate loans may be appropriate for buyers who plan to live in the property more than 10 years and like total payment stability. Consider paying points if you want to lower the rate and consider shorter term loans if you want to build equity faster,

Adjustable-Rate Mortgages (ARM)
Adjustable-rate mortgages have interest rates that adjust periodically based on market conditions. The initial rate is fixed for a period of time (dependant on the loan you select), and then adjusts annually based on the current market index; it can not go above a pre-determined cap. The initial interest rate for adjustable rate mortgages is generally lower than current fixed-rate mortgages, making them appropriate for buyers who want to take advantage of the lowest rate possible, are willing to accept payment changes, or cannot qualify for higher rate programs. Adjustable rate mortgages may also be appropriate for people with growing incomes, who will refinance in a few years or who be able to afford a larger payment in a few years if interest rates rise.

Mortgage Programs
Infinity Home Mortgage Company, Inc. strives to offer borrowers the most innovative and competitive loan programs available in the mortgage industry. We provide not only conventional loans but offer FHA and VA loans as well as alternative financing options to borrowers who have past or current credit issues and/or difficult to verify income.

Federal Housing Administration (FHA) Loans
FHA loans are insured by the federal government to help first-time homebuyers with low to moderate income and those who can’t afford a large down payment purchase a home. Loan qualification is typically easier than conventional loans and closing costs can often be included as part of the loan amount. FHA loans can be either fixed- or adjustable-rate; maximum loan amounts vary by state.

Veterans Affairs (VA) Loans
VA loans are insured by the federal government to help veterans of the armed services, active-duty personnel, reservists and their spouses purchase a home. VA loans offer a set interest rate for the entire length of the loan. Qualified borrowers may be eligible for no down payment loans and for mortgage payments up to 41% of their income (depending on other debt).

Jumbo Loans
Jumbo loans, also known as non-conforming loans, are for buyers that need to borrow a larger loan amount. With a Jumbo Fixed Rate option, you'll have the peace of mind in knowing your principal and interest payment will remain the same throughout the loan term.

If you'll most likely be moving again within the next 5 to 10 years, a Jumbo ARM may work best for you. These loans have a lower interest rate than fixed rate mortgages and may allow you to qualify for a larger loan amount.

Jumbo programs are required if you need a loan amount greater than $330,700.

Balloon Mortgages
Balloon mortgages have a fixed interest rate and fixed monthly payment for the term of the balloon loan, which is generally 5-7 years. At the end of balloon term the loan is due in full. The borrower may then refinance into new loan at current interest rates. Balloon mortgages are appropriate for buyers who plan to live in the property more than 5 years and are willing to refinance at the end of the balloon term if loan is not paid in full.

Alternative Financing
Infinity Home Mortgage Company, Inc. is proud to offer loan options that can help you move past financial difficulties including credit issues, high debt ratios, lack of savings and no credit history to help you achieve homeownership. Fixed- and adjustable-rates loan options are available. Contact an Infinity Home Mortgage Company, Inc. Advisor or call us at (856) 470-1101.

• What would my loan payments be at a fixed rate?
• What would my loan payments be at an adjustable rate?
• See if a balloon mortgage is right for you.
• Get pre-approved for free!
• Contact an Infinity Home Mortgage Company, Inc. Advisor or call (856) 470-1101

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 Lock, Cap or Float?

Lock a Rate
Locking a rate means that the lender will honor a rate for a specified period of time while your application is being processed. In a volatile interest rate market, locking a rate will protect you from rising interest rates and will give you the security of knowing what your interest rate will be at the time of closing. Be sure you know the lock-in period and that it allows enough time for your loan application to be processed.

Float a Rate
By floating a rate, you are subject to market fluctuations during the float period. If you think interest rates might drop before your loan is processed, you can “float” instead of lock. You can keep an eye on interest rates and lock in at any time until five business days before your closing.

Cap a Rate
You can place a ceiling on the interest rate without locking it by capping it. With a cap, interest rates can fall, but cannot rise above the ceiling for a fixed period of time. Note however, that the initial capped rate is slightly higher than daily market rate. In a volatile interest rate market, you’ll have to decide if you should cap a rate or lock it.

• Get pre-approved for free.
• Contact an Infinity Home Mortgage Company, Inc. Advisor or call (856) 470-1101.

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Pre-Qualification and Pre-Approval

Pre-Qualification
The first step in the purchasing process is understanding how much you can afford to pay for a home. With pre-qualification, you can do just that. Based on the information you provide, such as your income and estimated debt, we can let you know roughly how much you can afford and what you would likely qualify instantly. Pre-qualifying doesn’t require a credit check, so a loan commitment can not be made.

Pre-Approval
A pre-approval is an easy way of obtaining assurance that you meet the necessary requirements for a specific loan, even if you haven’t found the perfect home yet. Infinity Home Mortgage Company, Inc. will provide you with a commitment letter stating that we will lend you a certain amount of money to buy a home, subject to a property appraisal and other stated conditions. You’ll be able to look for a home with the security of knowing exactly how much you can borrow, and show sellers that you have the financing you need to buy a home. Apply online for your free pre-approval and get a response within 1 business day.

With our online application process, you can apply for pre-qualification or pre-approval for free. It's an easy, convenient and secure way to give us your information, so we can provide you with the answers you need.

• Get pre-qualified instantly for free!
• Get pre-approved within 1 business day for free!
• Contact an Infinity Home Mortgage Company, Inc. Advisor or call (856) 470-1101

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Pre-Closing

Title search and report. An examination of public records including land records, court records, past deeds, wills and other documents to verify that there are no liens, delinquent taxes or other claims against the property and that the seller has a clear, marketable title to transfer to you.

Title insurance binder. States the result of the title search and assures the lender the title to the property qualifies for a title insurance policy.

Survey confirms the property boundaries are as described in the purchase and sale agreement. (A survey is not required in all states.)

Termite, well, sewer or septic certificate. Certifies that the property is free from termites and/or other wood destroying insects. Also verifies that the sewage and water supply work properly. The sales contract will state whether you or the seller is responsible for these inspections and certificates.

Title insurance. Protects you and your lender against losses that may be incurred if the title to the property is not as the policy states it to be. It provides protection against risks such as a forgery, a recording error, claims of undisclosed or unknown spouses or heirs, etc., that did not appear in the public records when the title search was done.

Hazard insurance. Also referred to as a "homeowner's policy”. Provides protection for you and your lender against certain risks such as storms, fires, floods or other hazards that may damage or destroy the home. You must obtain hazard insurance prior to closing and provide proof of insurance to your lender.

Several other documents must be prepared by the lender before the closing:

HUD 1 settlement statement. The HUD-1 is a form used by the settlement agent to itemize all charges for a real estate transaction, based on the contract, for both you and the seller.

Loan documents. Final loan documents that grant your lender a lien against the property in order to secure the repayment of your loan. These documents include a promissory note, which is your legal promise to repay the loan; and a deed of trust/mortgage, the instrument that is recorded in the public records.

The deed. Transfers ownership of the property to you. The deed must contain a legal and accurate description of the property.

Mortgage insurance. A contract that insures the lender against loss caused by a borrower's default on a government mortgage or conventional mortgage. Mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA) or the Veterans Administration (VA).

• Get pre-approved for free.
• Contact an Infinity Home Mortgage Company, Inc. Advisor or call (856) 470-1101.

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Closing

The closing is the final phase of the home buying and mortgage process. Ownership of the property will be transferred from the seller to you, and you will sign documents that acknowledge your rights to the property you have purchased, your agreement to repay the money you have borrowed, and the lender's right to the property if you default on the loan. Make sure you review all your settlement documents and resolve any questions prior to signing them. Also consider asking your attorney to review the documents prior to closing.

In addition to your down payment, you will need to pay costs for processing your loan and transferring the property ownership from the seller to you. Closing costs generally range from 3% - 5% of your loan amount, and are based on where you live, the loan you choose and your closing date. You may be able to include your closing costs in your mortgage loan, check with your Infinity Home Mortgage Company, Inc. Loan Officer. When you apply for a loan, Infinity Home Mortgage Company, Inc. will give you an estimate of closing costs.

Closing costs include:

• Costs to process your loan (including property survey and appraisal); known as origination fees.
• City/county property taxes, insurance premiums paid in advance, including first-year mortgage insurance, first-year hazard insurance and first-year flood or earthquake insurance, if required.
• Title insurance charges
• Recording and transfer charges
• Attorney's fees
  
  You’ll need to bring certified or cashier’s checks for any remaining down payment and closing costs.
  
  
• Get pre-approved for free.
• Contact an Infinity Home Mortgage Company, Inc. Advisor or call (856) 470-1101.

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