Loan Process

Start here....Things to think about when buying a home?

It is hard to know where to begin! There are so many options that it can be very confusing to find the right type of loan. Your Residential Mortgage Loan Originator will help you. Some things to think about are when applying for a home loan are:
  •     How much can I afford to pay each month?
  •     How long do I plan on keeping this home?
  •     Is a lower monthly payment a higher priority than paying the loan down quickly?
  •     Am I able to make a down payment?
  •     How many years do I want to pay a mortgage?
  •     Will I be incurring any new obligations in the near future I need to consider?

The answer to these questions will help your RMLO show you some additionl loan options so that you can make the right choices for your financing. There are a wide variety of loan options to choose from.  It will be useful to know what is important to you. Here are some things to consider:
  •     The larger the down payment, the lower your monthly payment will be.
  •     A fixed-interest rate will tend to be higher than the start rate of adjustable rates.
  •     The longer the term of payback, the smaller the monthly payment.
  •     The smaller your payment, the larger the amount that is going to interest.
  •     The more that you pay to interest, the slower that you are building equity.

It is  useful to understand the essential differences in types of loans. There are really only three basic types of loans:
  •     Fixed Interest Mortgages (FRM)
  •     Adjustable Rate Mortgages (ARM)
  •     a Hybrid ( some combination of the other two)

Loans are also classified as either government loans or conventional loans.

Conventional loans are further broken down into either conforming or non-conforming loans. To qualify as a conforming loan (or an A paper loan), it must fall under the guidelines established by Fannie Mae and Freddie Mac, corporations that have established industry standards and guidelines that govern credit requirements, down payment amounts and maximum loan amounts.

Once you have these general types down, you will still have to look at the individual features of specific loan types to determine which one will best meet your needs. Your Residential Mortgage Loan Originator will walk you through all of the these features and options, so you can choose the best program that fits your needs.


You are rewarded by excelent credit! At the same time, your loan options can be limited by poor credit. A credit score or FICO score is a system of points earned based on your credit history. This three-digit number (raging from 300 to 900) is influenced by such factors, among others, as:
  •     late payments
  •     debt to credit ratio
  •     total debt amount
  •     age of accounts (the older the better)
  •     inquiries

There are three major credit bureaus (Experian, Equifax and TansUnion) that produce comparable credit scores using a version of FICO, the industry standard developed originally by Fair Isaac and Company. Because this credit score or FICO score is used by most lenders to determine your qualifications for a loan, you may want to see what you can do to increase your credit score or FICO Score before you apply for a mortgage. Your Residential Mortgage Loan Originator will explain your options and costs with you based on your credit scores at the Pre-Approval process.
We appreciate your business!
Your King Financial Group, Inc. Team.
(972) 539-2500


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