FAQs

Purchasing a home is a big decision, but it can have big benefits too that renting cannot provide:

Stability: first and foremost your home is YOUR HOME. A place that you can call your own.

An investment in your future. Each month you make a payment, you are one step closer to paying off your mortgage loan, and building equity along the way.

May provide a tax deduction. Each year, you may be able to write off your mortgage interest payments and property tax on your personal residence. There are other potential tax deductions tied to owning a home too. For some, this can be a significant tax savings. Be sure to consult your tax professional to determine what makes sense for you.

Appreciation of market value. While not all home values rise and fall at the same rate, over time, property values have kept up with inflation and can provide some price appreciation, which is helpful if you want to sell to move to a new location or into a bigger home. The combination of your equity build up and the appreciation in your home value will start you on the path of wealth creation.

Make it your own. Paint, decorate, remodel….when you own your home, you decide what improvements you want to make.

No more rent increases. When you purchase a home with a fixed rate mortgage, the payment for the principal and interest on your mortgage stays the same for the life of the loan, unlike rent, which typically increases every year (sometimes significantly!).

Loan payoff means no more mortgage payment! When you pay off your mortgage, which will happen over time, you will awaken one day and realize the joy of no more mortgage payments!

We are committed to making this experience simple and enjoyable from beginning to end. We've streamlined our process to ensure that buying your home is as smooth and stress-free as possible.

Conversation: This first step is crucial and one that will set the stage for the entire process going forward. You and your radius loan officer will assess credit-worthiness, establish expectations, and discuss some available financing options.

Application: The goal of our application is to gather as much information as possible up front. This gives us a major head start and allows us to fly through the process.

Documents: This is where you come in. We need your help getting your documents in as fast as possible. You will team up with your loan officer to collect items such as W2s, Pay Stubs, Bank Statements, and Employment History.

Appraisal: We team up with an industry leading appraisal management company that helps us keep the ball rolling. By maintaining a high standard for who we partner with, we can streamline what is often an extremely time consuming step.

Upfront Underwriting: radius underwrites every loan at the beginning of the loan process. This gives you a major advantage in a crowded market, and helps prevent any last minute rushing. Our "reverse" approach is unique, and allows you to bypass an industry full of stressful and slow lenders.

Approved With Conditions: Congrats, you're now approved with conditions. Conditions are like little red flags that show there are still items to address. You will work with your loan officer and resolve these. Now it's time to move forward into processing.

Fast Track Processing: Our process is goal-oriented rather than deadline-oriented. Most lenders attempt to just work towards a closing date or deadline. This often leads to problems and rushing around hours before closing or even missing the closing date. At radius we do things differently. By working to a goal we can have closing documents out weeks before closing and avoid all the last minute craziness.

Final Underwrite: The Underwriter will now review your loan and verify that all conditions have been taken care of. The loan process is now complete and is ready for closing.

Closing: We work alongside the closing attorney to assemble the final paperwork and confirm the total funds needed for the closing day. Everything we do leading up to this point ensures that the closing table is a smooth and exciting experience. Now, enjoy the moment as you receive the keys to your new home.

Welcome Home!

Get pre-approved – A pre-approval letter (not a pre-qualification letter) is an important first step in successful home hunting, so real estate agents and sellers take you seriously. It also gives you a sense of your financial standing.

Get your documents in order – You’ll need to document two years’ worth of your gross income, down payment, and credit. We’re here to help, connect with us any time.

Understand your credit score – Your credit score plays a key role in determining several factors of the mortgage you get, and there’s more to it than just paying your bills on time.

Do not increase monthly debt – Doing so while you are going through the process of buying a home as it could negatively impact your ability to buy the property / qualify for a loan.

Keep paying your rent on time - If you are renting, be ready to prove timely rent payments for at least 1 year.

Your credit report includes your current and some past credit obligations, if you paid those obligations in a timely manner, and both your outstanding and available credit. Your credit report also includes your credit score, which is derived from your payment history and how you access your available credit.

Just keep in mind that even with an excellent credit score you may not be able to get approved for a mortgage if your outstanding monthly payments on debt are too high in comparison to your monthly income. This is known as your debt-to-income ratio, and most mortgage lenders want it to be at 43% or less.

If you don't have a good credit score, you may still be able to purchase a home, but you will have fewer financing options and the cost of that financing will be higher. That’s why most mortgage lenders recommend you repair your credit prior to purchasing a home.

There are reputable credit counseling services that can help you understand what steps to take to improve your score (since it’s not always as simple as paying off debt), to make it easier to qualify for and obtain more favorable financing terms for your mortgage that will save you money.

The U.S. Department of Housing and Urban Development (HUD) has a list of approved counseling agencies on their website, and following are other organizations that provide credit counseling services.

Here is a reference guide to the more widely used phrases, concepts, terms, and acronyms Loan Officers and Realtors  use when discussing the process and requirements of homebuying.

Condo Association or Homeowner’s Association Dues (HOA)

These are fees that are collected each month for common area maintenance and ongoing costs of managing the property. The association uses this money to pay monthly expenses and accumulate an amount to pay for repairs.

Credit or FICO Score

A credit score is a number assigned to a person that indicates creditworthiness. Lenders use credit scores to assess a buyer’s capacity to repay a mortgage. There are three credit repositories (Experian, Transunion, and Equifax) and each have their own scoring methodology. The FICO score, a credit score calculated with software from Fair Isaac Corporation (FICO), is the most widely used for making credit decisions. A FICO score ranges from 300 to 850. The higher your score, the less you typically pay for credit, the lower your score, the higher you will pay for credit.

Debt-to-Income Ratio

A debt-to-income ratio is one way mortgage lenders measure your ability to manage the payments you make every month to repay the money you have borrowed. You calculate your debt-to-income ratio by adding up all your monthly debt payments and dividing them by your gross monthly income. Your gross monthly income is the amount of money you earned before your taxes and other deductions are taken out.

Earnest Money Deposit

It is typical for a buyer to deposit earnest money when entering into a contract to buy a home. This is NOT an additional cost but a portion of the money that will be needed to close the purchase transaction. This money is held in trust by the real estate agent and will be applied to settle the total costs of the transaction (including any contractually obligated costs, loan fees, down payment, etc.).

Escrow Account

Every mortgage loan servicer is required to establish an escrow account where funds from the monthly mortgage payment are kept separated from the account holding principle and interest, and used to make payments for certain fees that apply to the mortgage, usually property taxes and homeowner’s insurance.

Escrow or Closing Agent

Your escrow or closing agent is responsible for making sure that all of the contract conditions tied to the purchase and sale of a property have been met, such as money collected and transferred, documents signed, and deeds recorded. They typically work for an escrow company, or in some states, could be an attorney.

Escrow or Closing Company

An escrow or closing company is commonly used in the transfer of high value personal and business property, like real estate. If you have an escrow company handling your closing, that means that the agent will make sure that all of the conditions of sale are met and any money transfers happen within their trust accounts.

Flood Insurance

Flood insurance is a form of property insurance that pays the policyholder in the event of flood damage to the property. In certain flood-prone areas, a mortgage lender will require flood insurance as a condition of approving a mortgage loan. This coverage is also in addition to ordinary homeowner’s insurance and does not cover your personal property.

Full eClosings

All parties to the transaction appear in person. Loan documents are electronically signed by the borrower(s) and documents requiring notarization are printed and signed in ink.

Hazard Insurance

Hazard insurance is part of the coverage provided by your homeowner’s insurance policy that provides specific protection for a broad number of perils. Some of these perils are natural hazards, such as fire or hail damage, while others are manmade, such as theft or vandalism.

It's important to remember that not all insurance policies are the same. In some cases, coverage can differ from one state to another. For this reason, it's vital that you have a clear understanding of what is covered by your policy and never assume that certain perils are covered.

Hybrid eClosings

All parties to the transaction appear in person and all documents are electronically signed, notarized and recorded.

Interest Rate Float

Floating the rate, during the time from submitting your loan application and prior to closing, is a concept that allows you to wait to choose a final interest rate on your transaction. While the rate is floating, you are assuming the risk that interest rates will not go up or that they will fall. If rates have been dropping, then you might want to float the rate in the hope that rates will be even lower by the time you close your loan.

Interest Rate Lock

A rate lock is a guaranty from a mortgage lender that they will give a mortgage loan applicant a certain interest rate, at a certain price, for a specific time period. The price for a mortgage loan is typically expressed as points paid to obtain a specific interest rate.

Lender’s Title Insurance Policy

Required on all mortgage loans and purchased by the buyer, a lender’s policy protects the lender’s security interest in the property. This policy DOES NOT protect the buyer.

Loan-to-Value or LTV

This is the percentage of the purchase price that will be financed as a mortgage.

Monthly Mortgage Payment or PITI

Your monthly mortgage payment, also referred to as PITI, often includes the following:

Principal and Interest (P&I): Amount collected by the lender to repay the amount you borrow and the interest on it.

Property Tax (T): Amount collected by the lender to pay local property taxes when due.

Insurance (I): Amount collected by the lender to pay hazard or homeowners’ insurance, which covers the property in case of fire or other type of disasters. Lenders typically collect a monthly amount necessary to pay the annual premium every year.

Mortgage

A type of loan used to purchase residential property (your home). The property serves as security or collateral to a creditor (your lender) for the debt (the amount you borrow). This means the lender can take possession and sell the property to pay off the loan if the borrower defaults on the loan or fails to adhere to its terms.

Mortgage Insurance, MI or PMI

For homebuyers, mortgage insurance enables them to become homeowners years sooner by helping them purchase a home without a 20% down payment. For mortgage lenders, mortgage insurance is the first level of credit protection against the risk of loss on a mortgage in the event a borrower is not able to repay the loan, and there is not sufficient equity in the home to cover the amount owed. There are two types of mortgage insurers: government agencies and private insurers. The main government mortgage insurer is the Federal Housing Administration (FHA). Like private insurers, FHA insures lenders from losses when borrowers default; however, unlike private insurers, the taxpayers bear substantially all the financial risks when those loans are not repaid. More information on the differences between mortgage insurance and FHA loans can be found here.

Owner’s Title Insurance Policy

An owner’s policy protects the buyer and heirs against any financial loss from potential title defects (forged documents, undisclosed or missing heirs, missing signatures, unknown creditors, mistakes in public records, zoning violations, etc.). The policy will cover legal assistance and any valid claims. An owner’s policy is optional but considered absolutely necessary for the peace of mind that comes with knowing their interests are protected. The policy is purchased at closing for a one-time, upfront cost.

Personal Tax Rate

Your personal tax rate is the percent of taxes to gross income you pay on your Federal Income Tax Return.

Property Tax and Property Tax Rates

Property tax is paid to your local county tax authority and each county sets its own property tax rate. Your property tax is calculated by taking the county’s assessed value of the property and multiplying it by the tax rate.

Remote eClosings

All parties to the transaction appear through electronic means (audio & visual) and all documents are electronically signed, notarized and recorded.

Title Insurance

A condition of approving your mortgage loan is that it must be the first or only lien on the property. Title insurance protects an owner's or a lender's financial interest in a property from losses due to title defects, such as liens against a property that have priority over the mortgage loan. It is purchased as part of the closing process for a mortgage.

The list below is a great way to get started on the path to finding your new home. It outlines important things to consider before you begin your search.

Geographic Location: Consider factors such as average home prices in the area, job opportunities in your field, proximity to family, and climate preferences.

City vs. Suburbs vs. Rural: Consider the type of area you want to live in, and what your needs are. Do you prefer the space that suburban or rural living provides or do you prefer the closeness of city living?

Type of Home: Condos, townhomes, house, square footage and outdoor space – there are so many variables to consider. Are you a do it yourselfer when it comes to home maintenance or would you prefer the ease of care afforded with a condo? Remember condos and townhouses will probably have the added cost of a Homeowners Association Fee.

Neighborhood: Choosing the right area to fit your lifestyle and personality, as well as researching facts and statistics on things such as income averages, education, school district performance, etc. to get a better sense of the community.

School District: An important consideration if you have or plan to have children. Are you looking for private or public school system, and consider the costs involved. Areas with good school districts will hold their value in future years and afford you larger purchase demographic when you go to sell.

Proximity to Work: Your daily commute, and how much time you are willing to drive or take public transportation in your everyday routine. Calculate the added costs of a long commute along with your commute time.

Safety: Most would consider safety a key factor in selecting a neighborhood. There are online resources that allow you to check crime rates for an area you are considering.

Leisure Activities: Free time is always something to consider. Do you want your new home to be close to sports, restaurants, shopping, culture, etc.?

Visit During the Day and Night: You don’t just live in your home and neighborhood during the day. Before you decide on a home, it’s important to visit it at different times of the day and night to get the best sense of the neighborhood.