At Home in Berks - June 2017 - 10

Navigating the Mortgage Application Process

What you need to know

By Susan Shelly
Hoffmann Publishing Group, Inc.

R

egulations have tightened in past years, resulting in
tougher mortgage underwriting requirements. That
means that finding the right mortgage and completing a mortgage application can be daunting tasks, especially for first-time homeowners.

At Home in Berks asked some local banks and mortgage
companies to weigh in about different types of mortgages
and to offer some advice to help you get a handle on how
much mortgage you'll be able to afford. Local experts
also offered some tips for understanding some of the key
factors that lenders consider during the application process,
which can increase your chances of being pre-approved
for a loan and ultimately make the mortgage application
process a little less of a chore.
"The housing market is very competitive right now," said
Pam Shenk, Senior Vice President and Residential Mortgage Lending Manager of Tompkins VIST Bank. "That's
why getting pre-approved for a mortgage is so important."

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AT HOME IN BERKs June 2017

Let's first take a look at different types of mortgages.

Not all Mortgages are the Same

Choosing the right mortgage type is key in the home-buying process. Mortgages come with a multitude of options,
explained Christopher Alfarano, vice president/chief lending officer for Visions Federal Credit Union, but basically
there are two types.
*	 Fixed Rate Mortgage. A fixed rate mortgage is a loan in
which the interest rate on the note will remain the same
throughout the entire term, as opposed to mortgages in
which the interest rate may adjust or "float." Generally,
fixed rate mortgages come in 10, 15 or 30-year terms.
They are the most commonly issued type of mortgage,
making up more than 90 percent of mortgages issued.
*	 Adjustable Rate Mortgage. An adjustable rate mortgage, or
ARM, is just that. After the initial "fixed" period, the rate
changes and adjusts on a specified schedule. Considered
riskier than the fixed rate mortgage, an ARM payment
can fluctuate significantly. The reward for taking such
a risk is an initial rate below the 30-year fixed rate. A
one-year ARM is a 30-year loan in which your monthly

seoterra/123RF Stock Photo

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